India no longer wants to remain only a smartphone assembly destination. Instead, the country aims to become a global design and development hub. Therefore, the central government approved a new Mobile Phone Manufacturing Scheme (MPMS) worth ₹62,500 crore. The scheme will operate from financial year 2027 to 2031. Furthermore, the plan focuses on component manufacturing, research, design, and domestic value addition. The government targets ₹39 lakh crore production under this scheme.
Additionally, India aims for ₹15 lakh crore exports and 60,000 direct jobs through the initiative.
The biggest question remains whether this plan can help India become a stronger alternative to China.
Why The New Plan Changes India’s Mobile Strategy
Earlier, India mainly focused on assembling smartphones made by global companies. However, the new scheme shifts attention toward advanced manufacturing. Furthermore, companies will receive incentives between 2.25% and 5% on eligible sales. Companies using locally manufactured components will receive an additional 1.5% incentive. Additionally, the government introduced a separate 3% incentive for research, design, and R&D activities.
Therefore, the goal moves beyond assembly and focuses on technology creation within India.
The plan encourages companies to manufacture expensive components like PCBs, camera modules, displays, and sub-assemblies domestically.
Design In India Becomes The New Focus
The scheme introduces a major push toward “Design in India”. Firstly, companies will receive separate support for research and development activities. Furthermore, Indian engineers will work on new designs and advanced technologies. Additionally, the initiative aims to reduce dependence on foreign patents.
Therefore, India wants to become a global centre for innovation and product development.
Old PLI Scheme Created India’s Mobile Growth Story
India’s biggest mobile manufacturing success came through the Production Linked Incentive scheme.
Because of the PLI- LSEM scheme, India transformed from a mobile importer into the world’s second-largest mobile manufacturer. According to government data, mobile production increased from ₹18,000 crore in 2014-15 to around ₹5.5 lakh crore in 2024-25. Meanwhile, mobile exports grew from ₹1,000 crore to nearly ₹2 lakh crore. Furthermore, smartphones became India’s largest single export product in 2025. They surpassed traditional export items like diesel and cut diamonds.
The Ministry of Electronics and Information Technology also highlighted this transformation as a major manufacturing achievement.
How India Plans ₹39 Lakh Crore Production Target
The government expects the scheme to generate ₹39 lakh crore mobile production during its complete period. Additionally, officials aim to export around ₹15 lakh crore worth of mobile and electronic products. The plan could create nearly 60,000 direct employment opportunities. Furthermore, companies like Foxconn, Tata Electronics, Dixon, and others may expand factories. As a result, demand could rise for engineers, technicians, assembly workers, and R&D specialists.
Moreover, supply chains, logistics, and service sectors may create additional indirect employment.
Why India Needs This Plan Despite 99.2% Local Production
Currently, around 99.2% of smartphones used in India are manufactured domestically. However, the main challenge remains value addition. A ₹100 smartphone currently contributes only ₹15-20 value from India, while expensive components come from abroad.
Therefore, the government wants to increase domestic value addition to 35-40%. Additionally, this change will reduce import dependence and bring more technology and profits inside India.
The focus now shifts from final assembly toward complete product development.
Impact On Apple, Samsung And Global Companies
Global companies operating in India may benefit significantly from this scheme.
Apple is increasing production through suppliers like Foxconn and Tata Electronics. Furthermore, Samsung has already created a strong manufacturing base in India. Now, additional incentives for local sourcing may encourage global suppliers to establish factories in India. Therefore, India can develop a complete electronics ecosystem. The government wants to benefit from the China Plus One strategy.
This approach encourages companies to consider India alongside China for manufacturing operations.
Can India Compete With China In Smartphones?
India has become the world’s second-largest mobile manufacturer. However, China still leads in production, components, and exports. India currently produces more than ₹5.5 lakh crore worth of smartphones annually.Furthermore, smartphones became the country’s largest single export product in 2025.
The new MPMS scheme targets ₹39 lakh crore production and ₹15 lakh crore exports within five years. Meanwhile, China continues to dominate global electronics manufacturing with its complete supply chain network. However, Apple and other companies are expanding India operations through the China Plus One strategy.By July 2026, India produces around 25% of global iPhones. Additionally, India’s iPhone exports crossed ₹2 lakh crore. Therefore, stronger component manufacturing, design, and research could help India become more than an assembly hub.
India’s Growing iPhone Manufacturing Power
India is becoming a global production hub for Apple. By July 2026, India produced around 25% of worldwide iPhones. Therefore, one out of every four iPhones sold globally now comes from India.
In 2025, India assembled around 5.5 crore iPhones. Additionally, Indian-made iPhone exports crossed ₹2 lakh crore, around $24 billion. Foxconn and Tata Electronics remain Apple’s major manufacturing partners in India. Furthermore, Apple produces iPhone 17 series models, including Pro and Pro Max versions, in India.The government removed 5-7.5% import duties on smartphone components from July 9, 2026.
Therefore, production costs may reduce and investments may increase.
The Real Goal: From Made In India To Design In India
Until now, India mainly produced smartphones designed by foreign companies. However, product designs, patents, and intellectual property remained with global companies.
The new scheme changes this approach through dedicated design and research incentives. Furthermore, Indian companies can develop smartphones, hardware, software integration, and new technologies. Therefore, India aims to become a global design and innovation centre. This transformation represents a shift from “Made in India” toward “Design in India”.
