PLI 2.0 calls ring louder: India eyes 35% global mobile output; $130 billion production

New Delhi: The electronics industry has told the government that India can capture 30-35% of global mobile phone production over the next five years, with annual output of $110-130 billion and exports of $55-70 billion.

The industry is in talks with the ministry of electronics and IT (MeitY) on a proposed smartphone production-linked incentive (PLI) 2.0 scheme, likely to run from 2026 to 2031, executives said.

India accounts for about 15% of global mobile phone production, with annual manufacturing exceeding $64 billion. The existing PLI scheme has been the key driver, but with it ending on March 31, the industry wants the stimulus to continue to sustain momentum and build a deeper manufacturing and supply chain ecosystem. As part of the discussions, the industry has shared a roadmap to achieve production and export targets by FY31. Government officials said an incentive scheme is under consideration, but modalities are yet to be finalised.


“With a strong foundation, we have an opportunity to achieve 30-35% of global mobile production in the next five years,” said Pankaj Mohindroo, chairman of India Cellular and Electronics Association (ICEA), whose members include Apple, Foxconn, Tata Electronics, Google, Dixon and Flex. “To realise this ambition, it is critical to sustain the current momentum and continue investments. We are actively engaging with the government to shape the next phase of this growth journey.”

The industry said a higher global share would improve ecosystem depth, consolidate the supplier base and make research and development investments viable at scale. An executive said value addition alone does not ensure sustainability, but scale does.

The government is also examining the level of domestic value addition required to qualify for incentives and ways to boost exports without breaching World Trade Organization norms.

China's edge

Experts said the targeted production increase will have to be driven by exports, as domestic demand weakens. India’s smartphone market could shrink by more than 13% this year due to rising memory costs, which could increase device prices by 15-40%, ET reported earlier.

According to commerce ministry data, smartphone exports rose 47.4% from $20.44 billion in 2024 to $30.13 billion in 2025, with the US accounting for $19.7 billion, or 65% of total shipments.

In comparison, China’s smartphone exports fell from $132.6 billion to $120.6 billion during the same period, with shipments to the US declining sharply due to fentanyl-related tariffs. India’s tariff advantage in the US market has narrowed after the US Supreme Court struck down sweeping global tariffs imposed by the Trump administration. China was subject to a 10% fentanyl-related tariff in the US, raising the cost of its smartphone exports, while India faced no such levy.

While China continues to benefit from a well-developed supply chain and advanced manufacturing, India is still building these capabilities. “India now competes again on pure structural cost. Current cost disability vs China is in the range of 10-12% and unless the stimulus continues, it would be difficult for Indian manufacturers to compete globally,” said an industry executive.