Govt plans bigger PLI 2.0 push to boost smartphone exports

The upcoming scheme is expected to offer higher incentives, strengthen domestic value addition, and sustain export growth as India looks to stay competitive with China in the global electronics manufacturing landscape.

Government of India is reportedly in advanced discussions with smartphone and electronics manufacturers to roll out a revamped production-linked incentive (PLI) scheme, as the current programme approaches its March 31 deadline.

The proposed successor, often referred to as PLI 2.0, is expected to be finalised within the next few weeks. Industry stakeholders are pushing for a significantly larger financial outlay to help Indian manufacturers remain competitive against China, particularly amid shifting global trade dynamics.

Focus on value addition and exports

The new scheme is likely to prioritise increasing domestic value addition in electronics manufacturing, with a strong emphasis on building a robust component ecosystem within the country. At the same time, policymakers aim to sustain the rapid growth in smartphone exports, which have recently emerged as one of India’s top export categories.

The existing PLI scheme, launched in 2020 with an outlay of over Rs 40,000 crore, offered incentives on incremental sales of locally manufactured devices. It played a key role in attracting global manufacturers such as Apple suppliers and Samsung, helping India strengthen its position as a global smartphone production hub.

However, industry executives believe that continued support is essential to maintain this momentum. While India has reduced its cost disadvantage compared to China in recent years, a gap still remains, making higher incentives crucial for competitiveness.

Global pressures and policy continuity

Recent global developments have added complexity to the policy framework. Changes in international trade conditions, particularly in the United States, have reduced earlier export advantages for Indian manufacturers, prompting calls for a stronger incentive structure.

Officials also emphasise the need for continuity in policy support, as the domestic component ecosystem is still evolving and may take time to achieve cost efficiency. Ending incentives prematurely could risk slowing the progress made in recent years.

The government is also exploring ways to expand participation beyond a few large players and encourage broader industry involvement, including partnerships with global and domestic firms.

While final details are still under discussion, the new PLI scheme is expected to play a critical role in shaping India’s electronics manufacturing strategy and sustaining its export-led growth trajectory.