Competition heats up in India’s smartphone manufacturing sector as PLI winds down

New Delhi: India's Android smartphone contract manufacturing sector is expected to see stiffer competition as the production-linked incentive (PLI) scheme for large electronics winds down, with manufacturers luring brands away from existing partners through lower assembly costs, industry executives said. Lower assembly costs have become attractive for brands seeking to offset high component prices, they said.

The end of the scheme has not triggered a pull-back from the market. Instead, brands are spreading volumes across multiple manufacturers rather than concentrating orders with a single player. This has already resulted in Dixon Technologies, the largest contract manufacturer, losing market share to mid-tier rivals such as Bhagwati Products, Karbonn and DBG, according to industry analysts.

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"Bhagwati is actively stealing volume share away from Dixon," an industry analyst said, requesting anonymity. Earlier, Dixon handled 60% of Oppo's domestic volumes through its Chinese original design manufacturing partner Longcheer, he said.

Bhagwati's tie-up with China-based Huaqin, which has recently gained global market share, has strengthened its position to secure more volumes in India, the analyst added.

"In the January-March quarter alone, Bhagwati's smartphone production revenue doubled year-over-year to ₹4,800 crore, with revenues growing 43% sequentially in the March quarter driven by orders from Oppo, Vivo and Realme," the analyst said. The loss of volumes reduced Dixon's market share to 32% in March 2026 from 37% in January, according to an analysis of raw material import data from Volza. Bhagwati's share of domestic Android smartphone manufacturing rose to 17% from 14% during the same period.

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Dixon's management did not respond to messages seeking comment till press time. Bhagwati did not respond to request for comment.

Companies such as DBG also gained share from Dixon as Xiaomi and Longcheer increased production with the China-based electronics manufacturing services player during the March quarter. "With smartphone volumes stagnating and expected to fall this year, we are seeing EMS brands actively working to take away share from others. That's right now the only way to grow," another industry analyst said. He added that with the PLI scheme ending, brands wield greater bargaining power and are shifting volumes between manufacturers quickly, depending on pricing.