The proposed policy may replace the current PLI scheme for smartphones, which expires on March 31.
Companies like Apple and Samsung Electronics could benefit if exports and localisation become key eligibility criteria.
The government also wants brands such as Oppo, Vivo and Xiaomi to use India as a smartphone export hub.
India is working on a new set of incentives for smartphone manufacturers that could link government subsidies to exports and the use of locally produced components, according to a Bloomberg report. The proposed plan is said to replace the current Production Linked Incentive PLI scheme for smartphones, which will be expiring on March 31.
Unlike the current program, which primarily rewards companies for increasing domestic production, the new policy may encourage manufacturers to export more devices internationally. Officials are reportedly considering incentives linked to higher levels of local value addition in smartphones assembled in India. According to the reports, the proposal is currently being discussed, and details such as the total budget, structure, and incentive amounts have yet to be finalised.
If this gets implemented, this can be a big boost for Apple and Samsung. For the unversed, contract manufacturers producing devices for Apple have a large share in India’s smartphone exports. Apple is already planning to ship the majority of its US bound iPhone from India by the end of this year.
The government is also looking to push Chinese smartphone brands such as Oppo, Vivo and Xiaomi to use India as an export hub rather than just manufacturing for the domestic market.
How will this work?
According to the reports, the incentives may be tiered based on the level of localisation. Devices that use more product parts, such as camera modules, display assemblies, and other components, may receive greater benefits, particularly if they are exported. Furthermore, the incentives may complement the government’s electronics components manufacturing program, which aims to increase local production of parts and subassemblies.
So far, government officials believe the original PLI scheme has largely achieved its goal of increasing local assembly, as major smartphones sold in India are now manufactured domestically. Now, the next strategic plan appears to be increasing exports.
