A big expertise pool, authorities subsidies, and geopolitical headwinds that pressured a number of firms to diversify from China – these are some essential parts that got here collectively for world smartphone firms, like Apple and Samsung to arrange manufacturing bases in India. After efficiently having the ability to localise smartphone meeting within the nation for home consumption and a few exports, the federal government has shifted its focus to deepening native worth addition within the sector.
The outcome: subsidy schemes that take a look at incentives on the parts degree – by means of the Rs 76,000 crore India Semiconductor Mission for chip fabrication and packaging, and the not too long ago notified Rs 23,000 crore scheme for passive electronics parts. Alongside the manufacturing linked incentive (PLI) schemes for smartphone and laptop computer meeting, the federal government has now launched assist for virtually all layers of electronics manufacturing, making the sector an important development driver for the Indian economic system.
The important thing goal: driving up native worth addition within the sector, decreasing India’s import dependence on international locations like China, and creating good high quality jobs. Presently, the home worth addition stands at round 15-20 per cent, with the federal government hoping to double that within the coming years (China’s present worth addition within the sector is round 38 per cent). Worryingly, India’s commerce deficit with China reached an all-time excessive in 2024-25, nearing $100 billion.
The electronics parts manufacturing scheme
Earlier this month, the IT Ministry notified the Rs 22,919 crore incentive scheme for electronics parts, which takes the baton ahead from its two PLI schemes, which largely concentrate on the comparatively straightforward meeting of electronics objects like smartphones and computer systems.
Underneath the brand new scheme, unfold over six years, the federal government is concentrating on localising manufacturing of parts like show modules, sub meeting digital camera modules, printed circuit board assemblies, lithium cell enclosures, resistors, capacitors, and ferrites, amongst others. These are utilized in devices like smartphones and laptops, and home equipment like microwave ovens, fridges and toasters, amongst others. Up to now, as smartphone and laptop computer meeting has grown within the nation, so has the nation’s dependence on China from the place firms sourced inside parts. The federal government desires to plug that hole.
It’s hoping that a minimum of 91,600 direct jobs can be created as a part of the scheme, and has tied taking part entities’ yearly subsidies to the variety of jobs they create. The scheme is predicted to generate manufacturing of Rs 4.56 lakh crore and usher in incremental funding of Rs 59,350 crore.
“Parts import will scale back after this scheme. We have to come out of the import substitution mindset and go ahead with export led promotion. Viability comes after massive scale manufacturing. Electronics manufacturing is round $120 billion proper now and we’re concentrating on that to develop to $500 billion within the coming years,” Union IT Minister Ashwini Vaishnaw mentioned earlier.
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How the PLI schemes are performing, what’s subsequent
The smartphone PLI scheme has been among the many most profitable of the 14 such programmes launched in 2020 for a number of sectors. The IT {hardware} PLI, initially a laggard, obtained a booster shot from the federal government in 2023, with elevated allocation of Rs 17,000 crore. Underneath these schemes, the federal government gives an incentive, which is linked to incremental gross sales.
As of February 2025, the PLI scheme for smartphones has generated:
Cumulative funding of Rs 10,905 crore
Cumulative manufacturing of Rs 7,15,823 crore
Cumulative exports of Rs 3,90,387 crore
Direct jobs for 1,39,670 folks
In the identical timeframe, the PLI scheme for laptops and computer systems has generated:
Cumulative manufacturing of Rs 10,365 crore
Cumulative funding of Rs 522 crore
Direct employment for five,132 folks
The Indian Specific had earlier reported that below the PLI scheme for smartphones, the federal government has disbursed near $1 billion (Rs 8,700 crore) within the three years from 2022-23 to 2024-25, with Foxconn, Tata Electronics and Pegatron, the three contract producers of Apple receiving cumulatively over 75 per cent of the quantity. Now, the federal government can be contemplating whether or not incentives needs to be linked to metrics past incremental gross sales similar to home worth addition and incremental exports, as a subsequent step to PLI schemes, that are nearing sundown within the subsequent 1-3 years.