Samsung to boost India phone exports under new incentive scheme

New Delhi: Samsung plans to increase exports of mobile phones from India, leveraging the government's new Mobile Phone Manufacturing Scheme that offers incentives at higher rates for incremental shipments, said people aware of the matter.

The South Korean electronics giant is considering expanding India production, including making fresh investments, to boost exports from here. But if the international market continues to contract due to the high cost of memory chips, it could explore a shift of capacity.

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Numbers Reflect Strategy

Samsung may shift production from countries like Vietnam to take advantage of the incentive scheme, the people told ET.

"During discussions on the new scheme, Samsung committed to increasing exports and taking all the measures including increasing capacity and recalibrating its global production strategy to make India a major hub for phone manufacturing," an official said on the condition of anonymity.

Samsung did not respond to an email seeking comment.

The company's latest export numbers for mobile phones seem to reflect its strategy. In the first five months of the current fiscal year, Samsung exported phones worth about $2.6 billion from India. Going by this, the company could post its best ever exports from India in fiscal 2027.

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Unlike Apple, which exports more than 70% of its India production, Samsung has been shipping only around 40-50% to markets abroad.

As per industry data, it exported about $21.2 billion worth of phones from India since FY2020-21, when the country implemented a production-linked incentive (PLI) scheme for mobile phones. While the highest exports were $4.4 billion in FY24-25, exports dropped to around $4 billion in FY25-26, when the company was not part of the PLI scheme, having completed its five-year tenure in FY24-25.

The company started increasing exports again this fiscal year, even as the government announced the new five-year Rs 62,300 crore scheme.

To become eligible for incentives under the new scheme, an existing brand must increase annual sales by a minimum of Rs 5,000 crore in each year of the scheme period, with the base being fiscal 2026.

For instance, to become eligible for the incentives in FY27, Samsung's sales must increase by Rs 5,000 crore from total sales in FY26. For FY28, the increase should be at least Rs 10,000 crore from the base year, and for the final year in FY31, it should be Rs 25,000 crore.

While the scheme does not specifically promote exports, it has been framed in a way that exporting more will draw higher incentives. The scheme offers incentives in the range of 2.5% to 5%, with an additional 1.5% to companies that use locally manufactured components like display and camera modules, enclosures, batteries and USB cables.

An industry executive said the company would be utilising its capacity spread across factories globally for making phones, including the hub in Vietnam, depending on cost efficiencies. With stress in the mobile phone market due to memory price shocks, production would, however, be aligned to a country that offers the best value, he said.

Vietnam Global Hub

Samsung has one of its largest factories in Noida, but Vietnam remains the global hub for manufacturing and exports. Unlike Apple, which has been gradually shifting iPhone production from China to India, Samsung is not shifting production from Vietnam where it has a well-developed ecosystem. The company, however, is also expanding in India organically and is already a participant in the component manufacturing scheme.

Application window for the new scheme opened on October 15 and companies are expected to apply in the coming months if they want to claim incentives for the current fiscal year. The application window will remain open till March 31, 2029.

The government expects the new scheme to help increase domestic value addition in smartphones to 40-45% by the end of the scheme from 24% now.

It projects cumulative mobile-phone production of Rs 39 lakh crore and exports of Rs 15 lakh crore during its scheme period, creating an estimated 600,000 new direct jobs.

The previous PLI scheme helped production reach Rs 22 lakh crore and exports over Rs 7.5 lakh crore. It is estimated to have created 1.2 million jobs.

Under the previous scheme, the government disbursed Rs 19,090 crore in incentives, and collected Rs 25,000 crore in direct tax and Rs 3 lakh crore in GST from the smartphone industry.