India’s success in the smartphone sector under the Production Linked Incentive Scheme has emerged as a major example of export-led manufacturing growth. The experience is now being viewed as a model for strengthening India’s broader industrial policy and transforming the country into a global manufacturing hub.
The PLI scheme was launched in 2020 under the Atmanirbhar Bharat Abhiyan to encourage domestic manufacturing, attract investments, reduce import dependence, and boost exports.
What is the PLI Scheme?
The PLI scheme is a performance-based incentive programme in which companies receive financial incentives based on incremental production and sales over a base year.
Key features include:
- Coverage of 14 sectors such as electronics, pharmaceuticals, telecom, automobiles, textiles, and solar modules.
- Total allocation of nearly ₹1.97 lakh crore.
- Focus on creating global manufacturing competitiveness.
However, only around 10% of allocated funds have been disbursed so far, indicating uneven implementation across sectors.
Success of Smartphone Manufacturing
The smartphone PLI scheme has been one of the most successful industrial initiatives in recent years.
Key Achievements
- Export Growth
Mobile phone exports increased dramatically:
- From $3.1 billion in 2020
- To nearly $24 billion in FY2025
India’s global share in smartphone exports rose from 1% to 8%.
- Manufacturing Scale Production nearly doubled:
- From $30 billion
- To around $64 billion
India has now become the world’s second-largest mobile phone manufacturing country.
- Employment Generation The sector generated nearly:
- 1.5–2 lakh jobs
The labour-intensive assembly ecosystem helped utilise India’s demographic advantage.
- Integration into Global Value Chains The success was driven by:
- Large global firms,
- Export orientation,
- Competitive assembly operations,
- Improved logistics and policy support.
Lessons for Industrial Policy
The smartphone experience offers several important lessons for expanding PLI success to other sectors.
- Export-Led Growth
Future PLI schemes should focus on integrating India into global value chains instead of relying mainly on import substitution.
- Assembly-First Strategy
Prioritising downstream manufacturing and final assembly can rapidly create jobs and scale production before moving into deeper component manufacturing.
- Lower Input Costs
Reducing tariffs and non-tariff barriers on components and raw materials can improve competitiveness and exports.
- Ease of Doing Business
Industrial growth requires:
- Faster approvals,
- Better logistics,
- Stable policy environment,
- Strong Centre-State coordination.
- Focus on Labour-Intensive Sectors
PLI support should prioritise sectors such as:
- Textiles,
- Footwear,
- Toys,
- Electronics,
- Telecom equipment.
These sectors can generate large-scale employment and boost exports.
Conclusion
The smartphone PLI scheme demonstrates that targeted incentives, export orientation, and integration with global supply chains can significantly enhance India’s manufacturing capabilities. Replicating these lessons across labour-intensive sectors can help India achieve sustainable industrial growth, employment generation, and greater global competitiveness.