India may raise domestic value-addition targets for smartphone manufacturing to over 55% under the proposed PLI 2.0 scheme.
The move comes as policymakers seek to reduce reliance on imported components such as displays, camera modules, and chipsets.
The revamped scheme is expected to align with the ₹40,000 crore Electronics Component Manufacturing Scheme to strengthen local supply chains.
Centre Reworks Smartphone PLI Scheme to Cut Reliance on Imports
The government is considering a revamped PLI 2.0 scheme for smartphones that prioritises deeper local manufacturing and reduced dependence on imported components
Summary
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The Production Linked Incentive (PLI) scheme for mobile phones is set for a major overhaul, with the government likely to target domestic value addition of more than 55%, The Economic Times reported, citing sources.
The revised scheme is expected to be finalised soon and aligned with the existing ₹40,000 crore Electronics Component Manufacturing Scheme (ECMS) to boost local sourcing of critical components.
According to the report, the move comes amid concerns within the government over India's continued dependence on imported high-value components, despite emerging as a major smartphone assembly and export hub.
The Ministry of Finance and the Ministry of Corporate Affairs have reportedly flagged the issue, prompting the Expenditure Finance Committee (EFC) to ask the Ministry of Electronics and Information Technology (MeitY) to revisit certain aspects of the proposed PLI 2.0 scheme.
Why the Change?
The EFC believes that while the existing scheme has succeeded in boosting manufacturing and exports, stronger measures are needed to encourage deeper domestic value addition and better integration with the local components ecosystem, the report said.
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The original PLI scheme, launched in April 2020 with an outlay of ₹40,995 crore, aimed to increase domestic value addition in mobile phones to 35-40% and in electronic components to 45-50%, up from 15-20%.
However, domestic value addition in mobile phones has risen to only about 18-20% as of April, according to the report.
MeitY officials attributed the slower-than-expected progress to continued reliance on imported high-value components such as display assemblies, camera modules, and semiconductor chipsets.
Push for Self-Reliance
The report said the revamped PLI framework forms part of the Centre's broader push to strengthen domestic manufacturing capabilities, reduce import dependence, and build resilient supply chains.
Despite concerns over local value addition, the government is expected to retain key features of the existing scheme, given that the 32 companies approved under the programme have exceeded most of their production and export targets.
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The PLI scheme for mobile phones was originally launched to transform India into a global smartphone manufacturing hub.
While initially conceived as a five-year programme, it provided incentives of 4-6% on incremental sales over six years, up to FY26.