Smartphone manufacturing in India enters a new phase as the government raises the incentive bar under its Mobile Phone Manufacturing Scheme.
The Rs 62,500 crore scheme builds on the earlier smartphone PLI program but shifts greater attention toward exports and domestic value addition.
The new framework could favor large electronics manufacturers such as Dixon Technologies, according to JM Financial.
The brokerage expects the higher entry threshold, export focus and localization incentives to strengthen the position of established players.
The policy also comes as India looks to deepen its electronics manufacturing ecosystem and strengthen its global role.
The new scheme changes the policy approach to smartphone manufacturing. The Union Cabinet approved the Mobile Phone Manufacturing Scheme with Rs 62,500 crore, as the program is an extension of the earlier smartphone PLI framework.
The first PLI phase focused mainly on expanding production. The new scheme puts greater emphasis on exports and domestic value addition. It also encourages manufacturers to increase localization across the electronics supply chain.
The higher entry threshold could favor companies that already operate at scale. JM Financial expects larger electronics manufacturers to gain an advantage under the new framework.
Also Read: From Cost Reduction to Structural Cost Leadership in Manufacturing
India has already expanded its smartphone manufacturing capacity significantly under the first PLI program. Mobile phone production increased from 2.1 trillion in FY20 to 5.5 trillion in FY25. Exports have also grown sharply. Mobile phone exports increased eightfold and reached 2 trillion in FY25. The new scheme aims to build on this momentum.
The export focus could help Indian manufacturers serve international markets from domestic production bases. It also supports the government's broader effort to establish India as a global electronics manufacturing hub.
Dixon Technologies stands out as a potential beneficiary of the new PLI 2.0 framework. JM Financial expects the company's existing scale and manufacturing capabilities to provide an advantage as the eligibility requirements become more demanding.
Dixon has also strengthened its smartphone manufacturing operations through partnerships and capacity expansion. Its recently approved Vivo joint venture adds another potential source of smartphone volumes.
The government approved the Dixon-Vivo joint venture earlier this year. Dixon holds a 51 per cent stake, while Vivo Mobile India holds 49 per cent. The venture will manufacture smartphones for Vivo and can also serve other brands. Dixon's existing manufacturing scale could therefore help it capture more opportunities under the new scheme.
The biggest change in India's smartphone manufacturing policy lies in the stronger focus on localization. The government wants manufacturers to move beyond handset assembly and develop deeper domestic supply chains.
The new framework includes incentives linked to domestic sourcing of components and sub-assemblies. The scheme also provides additional incentives for Indian mobile phone brands that undertake product design and research and development. This approach could encourage companies to invest in higher-value components and manufacturing capabilities.
The latest Mobile Phone Manufacturing Scheme marks a shift from simply increasing production volumes to building a more competitive electronics ecosystem. India has already established itself as the world's second-largest mobile phone manufacturer.
The next phase will focus on exports, localization and higher domestic value addition. Companies such as Dixon Technologies could benefit from this transition because of their existing scale and manufacturing network. For India's smartphone manufacturing sector, PLI 2.0 therefore raises both the opportunity and the competitive threshold.
.jpg "Energy Companies")
We use cookies to ensure you get the best experience on our website. Read more...
