India has announced a new wave of e-incentives that will focus its policy on both smartphones and semiconductors, and hopes to continue to attract more supply chain links and reduce reliance on China’s manufacturing system, building on the iPhone build-up capacity.
The mobile phone manufacturing subsidy was extended by five years.
The total size of this new programme, called the “Mob Phone Manufacturing Programme”, is Rs. 62.5 billion, or $6.5 billion, for a five-year period. Subsidies will be awarded on the basis of eligible sales, with incentives ranging from 2.25 to 5 per cent.
An additional 1.5% incentive is available if an enterprise procures key parts and sub-components in India. At the same time, New Delhi indicated that an additional Rs. 128 trillion, or approximately $13.3 billion, would be invested to expand indigenous semiconductor manufacturing support.
Compared to the $10 billion chip incentive scheme launched in 2021, the new round of support will cover more links, including equipment, materials, chip design and development.
Apple amplification becomes policy.
Over the past decade, India has emerged as an important node of global mobile phone manufacturing. Apples, Samsungs and rice, OPPOs, vivos etc. are all deployed locally. Apples have been assembled in India since 2017 for iPhone and have subsequently been expanded continuously through partners such as Fuscon and Tata Group.
It is reported that about a quarter of the iPhone is currently produced in India. This was seen as an important step in splitting the supply chain risk in China. Last week, the Government of India also approved a joint venture project between vivo and the Indian electronic manufacturer Dixon Technologies to manufacture mobile phones.
India had also recently eliminated import tariffs for some mobile phones and electronic parts, and measures were expected to reduce production costs for enterprises such as apples and millet.
Moving from assembly to parts and development
Research institute Counterpoint data show that China accounted for 63 per cent of global smartphone production in 2025 and India for 18 per cent. This means that, while India has made significant progress on the whole aircraft assembly, the gap is still large compared to China ' s mature manufacturing and support systems.
According to IDC researchers, India's previous policy was more “multi-assembly”, while the new programme began to shift to deeper localization, including parts, research and development and higher value-added. India currently performed well in the final assembly but still relied on imported parts and components.
To promote indigenous brand development, the Government of India also plans to provide additional subsidies for product design and research and development at 3 per cent of eligible sales. However, indigenous mobile brands such as Micromax, Karbonn and Lava have lost their market share in recent years in competition with Chinese producers.
Target increased global manufacturing share
The Government of India expects that, by March 2031, this mobile phone manufacturing programme will generate about Rs. 39 trillion and create about 60,000 direct jobs.
Industry believes that India ' s attractiveness to more manufacturers would be enhanced if the local spare parts system were to evolve. The attractiveness of local procurement and local production is increasing, especially in the context of high storage prices and the weakening of Indian rupees to increase import costs.
The current goal in India is not just to take over assembly orders, but to increase the share of value in the global electronic supply chain. The practical effectiveness of this round will be determined by the ability to retain supplier networks, engineering capabilities and higher value added manufacturing in the home country.