Prime Highlights
- India announced nearly ₹1.9 trillion in incentives for smartphone and semiconductor manufacturing.
- The new schemes aim to expand local production, research, and electronics supply chains.
Key Facts
- The Mobile Phone Manufacturing Scheme will run for five years until March 2031.
- India expects the programme to create about 60,000 direct jobs and boost electronics manufacturing.
Background
A new set of incentive schemes worth approximately ₹1.9 trillion has been unveiled by the Indian government to boost the manufacturing of smartphones and semiconductors.
New Mobile phone manufacturing scheme with allocation of ₹625 billion and will be operational for 5 years from 2026-04-01 to 2031-03-31. The incentive for mobile phone manufacturers, under the new scheme, will depend on mobile phone sales, with 2.25% to 5% being offered. Manufacturers that leverage their components and sub-assemblies made in India will receive an extra 1.5% incentive, and those who make products exclusively for Indian smartphone brands will receive an incentive of 3%.
The investment behind India’s semiconductor programme will go up by ₹1.28 trillion. This will be poured into chip manufacturing, equipment, materials, research and design. This is on top of the incentive programme that was launched in 2021.
In the last ten years, India has emerged as one of the largest manufacturers of smartphones. A few global brands that have scaled up their manufacturing operations in India are Apple, Samsung, Xiaomi, Oppo and Vivo. The company has diversified its manufacturing base, with around one-fourth of its iPhones being manufactured in India.
The government has estimated that the production of mobile phones under the scheme will be around ₹39 trillion and there will be around 60,000 direct employment opportunities during the period of the scheme.
Experts in the industry have expressed their optimism that the new policy will spur increased local production of parts, boost investment and research and development. But it can also help India to establish a robust electronics supply chain and give it a greater share of the global smartphone manufacturing in the near future, they added.
