Future of mobile PLI under review amid rising domestic production

With the mobile phone production-linked incentive scheme set to end in March, the government is evaluating whether to extend or redesign incentives to sustain manufacturing growth and address remaining cost challenges in India’s electronics ecosystem.

The Union government is reportedly reviewing policy options to maintain momentum in India’s fast-growing mobile phone manufacturing sector as the current production-linked incentive (PLI) scheme approaches its scheduled conclusion. Officials are examining whether the programme should be extended or replaced with a restructured incentive framework to consolidate recent gains and tackle unresolved structural constraints.

The existing mobile phone PLI scheme, with an approved outlay of ₹40,995 crore, is due to wind up in March. According to reports citing government sources, no final decision has yet been taken on either continuing the scheme or determining the scale and structure of any successor programme.

Policy review and structural challenges

According to reports, senior officials have acknowledged that while India’s competitiveness in mobile manufacturing has improved significantly, certain cost disadvantages persist. Ministry of Electronics and Information Technology (MeitY) Secretary S. Krishnan has noted that deeper structural issues, particularly around component ecosystems, are yet to be fully resolved.

Introduced in April 2020, the mobile PLI scheme offered incentives ranging from 4 to 6 per cent on incremental sales of domestically manufactured handsets. It accounted for nearly 20 per cent of the total financial outlay across all PLI programmes, making it one of the government’s most significant industrial policy interventions.

Although localisation of components is gradually improving, officials believe that newer measures, including the Electronics Component Manufacturing Scheme, may take at least two years to meaningfully lower production costs across the value chain.

Manufacturing scale and export growth

Government data indicate that incentive payouts under the mobile PLI between FY22 and FY25 totalled about ₹8,700 crore, with a substantial share going to a limited number of large manufacturers. The scheme has played a key role in strengthening India’s electronics manufacturing services sector, helping revenues cross ₹1.25 trillion in FY24.

Over the past decade, mobile manufacturing capacity has expanded dramatically, with production units increasing from just two to nearly 300 by March 2025. In FY25, electronics production touched ₹11.3 trillion, while exports reached ₹3.27 trillion.

As the current PLI framework expires, the Centre’s policy choice will be pivotal in determining whether India can sustain export-led growth and reinforce its position as a global mobile manufacturing hub.