India to revamp smartphone incentives with export push and localisation targets: Report

India is preparing a fresh set of incentives aimed at strengthening its position as a global smartphone manufacturing hub, with new policies expected to reward companies that export devices and rely more heavily on locally produced components.

The move also comes at a time when the tech industry is grappling with rising smartphone prices globally, driven in part by a surge in memory chip costs that is pushing up manufacturing expenses for device makers.

Officials are currently working on a revamped incentive framework that would succeed the government’s flagship production-linked incentive programme for smartphones, reports Bloomberg.

The new scheme is likely to place greater emphasis on exports and deeper local manufacturing rather than simply assembling devices within the country.

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If implemented, the policy could provide a boost to major smartphone makers and their manufacturing partners, including Apple Inc and Samsung Electronics, which have significantly expanded their production footprints in India over the past few years.

The current smartphone PLI programme, which focused on encouraging incremental domestic production, is scheduled to conclude on March 31. According to the Bloomberg report, policymakers are now considering a second phase that reflects how India’s electronics industry has evolved since the initial incentives were introduced.

Export-focused incentives take centre stage

Bloomberg reports, that the proposed scheme would link government subsidies more directly to overseas shipments, according to people familiar with the discussions. Companies exporting larger volumes of smartphones from India could receive higher incentives under the new structure.

Such a shift marks a notable change from the existing programme, which primarily encouraged companies to boost domestic production levels. With most smartphones sold in India already assembled locally, policymakers now see exports as the next frontier.

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India has rapidly emerged as one of the fastest-growing smartphone export hubs globally. A large portion of this expansion has been driven by Apple’s contract manufacturers.

Last year, Apple Inc became the third major technology firm to cross the $4 trillion market value mark, buoyed by strong demand for its latest iPhone lineup. The milestone came as the company’s shares climbed to record levels following the launch of the iPhone 17 series.

A significant factor supporting Apple’s growth has been the rapid expansion of its manufacturing operations in India. The country has become an increasingly important production hub for the company, with iPhone exports from India to the United States now surpassing those shipped from China. This shift reflects Apple’s broader strategy to diversify its supply chain while capitalising on India’s growing role in global electronics manufacturing.

Meanwhile, the Indian government is also keen to encourage Chinese smartphone brands such as Oppo, Vivo and Xiaomi to expand their export ambitions. Many of these companies currently use their Indian factories mainly to serve local demand.

By linking incentives to overseas shipments, policymakers hope to position India as a more integral part of global electronics supply chains at a time when manufacturers are diversifying production away from traditional hubs.

Push for deeper local supply chains

Another key feature being considered is stronger incentives for companies that source more components locally. Rather than rewarding simple assembly, the new programme is expected to prioritise higher levels of domestic value addition.

Under the proposal, subsidies may be structured in tiers based on the proportion of locally produced parts used in each device. Manufacturers could earn additional incentives for sourcing components such as camera modules, display assemblies and other electronic sub-parts from Indian suppliers.

Devices that meet both high localisation thresholds and export targets would likely qualify for the largest incentives.

Despite the progress made in attracting large-scale assembly operations, India’s electronics ecosystem still faces several challenges. Many advanced components, including semiconductors and sophisticated modules, are still imported from countries such as China, South Korea and Taiwan.

Companies like Apple have also encountered logistical hurdles and a limited domestic supplier base capable of meeting the company’s strict quality standards.