(Text/Observer Network, Liu Bai)
India is betting on a new round of industrial subsidies, aiming to gain a larger share in the global smartphone supply chain.
On July 15th, the Indian government announced the introduction of a new mobile phone manufacturing incentive program, and increased support for the semiconductor industry. The total investment amounts to approximately 1.93 trillion rupees (about 19.8 billion US dollars). The goal is to expand the scale of domestic electronics manufacturing and attract more global companies to transfer their production processes to India.
Among them, the newly introduced “Mobile Phone Manufacturing Scheme” has a budget of approximately 625 billion rupees (about 6.5 billion US dollars), and it is scheduled to last for five years. According to the scheme, mobile phone manufacturing companies will receive subsidies ranging from 2.25% to 5% based on their eligible sales volume. If these companies purchase critical components and parts in India, they can additionally receive an incentive of 1.5%.
Additionally, the Indian government announced an additional investment of approximately 1.28 trillion rupees (about 13.3 billion US dollars) to support the semiconductor industry. It also expanded the $10 billion chip incentive program launched in 2021, providing more support for fields such as chip equipment, materials, and design research and development.
Over the past decade, India has gradually become an important manufacturing base for smartphones globally. Companies such as Apple, Samsung, and Chinese brands like Xiaomi, OPPO, and vivo have established production facilities in India.
Since 2017, Apple has been assembling iPhones in India, and has expanded its production capacity through partners such as Foxconn and Tata Group. Currently, approximately 25% of iPhones are produced in India, making it an important node for Apple's supply chain diversification.
However, India's goal in this arrangement is clearly not just to increase assembly orders.
June 29, 2026, Mumbai, India. A man is inspecting Apple products in a store. IC Photo
American tech media outlet TechCrunch pointed out on the 15th that this new round of policies indicates that India's manufacturing strategy is shifting from focusing on "expanding the assembly scale" in the past to enhancing domestic R&D capabilities and industrial value addition.
Market research firm IDC's vice president Navkendar Singh said that although India has made progress in the final assembly of mobile phones, a large number of components still rely on imports. The focus of this policy is to encourage more key components and suppliers to enter India.
He believes that Apple will directly benefit from this trend. As India’s manufacturing and export capabilities improve, Apple will have more confidence in expanding its production layout in India, thereby driving more supply chain companies to follow suit.
In recent years, India has also been continuously adjusting its policies to attract electronic enterprises.
Just last week, the Indian government approved a joint venture between Indian electronics manufacturer Dixon Technologies and a Chinese company for mobile phone manufacturing. Additionally, New Delhi has removed certain import tariffs on mobile phones and electronic components, in order to reduce the production costs of these companies.
In addition to attracting foreign companies, India also hopes to re-establish its domestic mobile phone brands.
Indian Information Technology Minister Ashwini Vaishnaw stated that the government plans to support Indian companies in creating their own mobile phone brands. Under the new plan, companies that engage in product design and development, as well as those that promote the development of Indian brands, can receive additional subsidies equivalent to 3% of their eligible sales.
India previously had local smartphone brands such as Micromax, Karbonn, and Lava. However, as Chinese companies like Xiaomi, vivo, and OPPO expanded rapidly, these brands gradually lost market share.
Indian Mobile Association (ICEA) Chairman Pankaj Mohindroo has set a higher goal, hoping that India will account for 35% to 40% of the global mobile phone production in the future.
According to the Indian government's estimates, by March 2031, this initiative is expected to generate a mobile phone industry worth approximately 39 trillion rupees (about 405 billion US dollars), and create around 60,000 direct jobs.
However, it is widely believed in the industry that there is still a significant gap between India and the point where it can truly challenge China's position in the global smartphone manufacturing sector.
According to market research firm Counterpoint Research, by 2025, China will account for 63% of the global smartphone production, while India will account for approximately 18%. Whether it's the number of component suppliers, engineering talent, logistics systems, or manufacturing experience, the industrial network that China has developed over many years remains a advantage that India will struggle to replicate in the short term.
In fact, India's recent breakthroughs in the mobile phone manufacturing industry are more evident in the final assembly stage. Industry analysts point out that assembly is only a relatively less valuable part of the smartphone supply chain. It is chips, core components, product design, and engineering research capabilities that determine a company's and country's position within the supply chain.
This time India launched a new manufacturing incentive policy in order to change the situation.
According to TechCrunch analysis, India's previous 'assembly model' is shifting towards 'enhancing industrial depth and local value creation'. The focus of policies has shifted from simply attracting companies to set up factories, to encouraging the production of key components and the development of research and development capabilities.
Counterpoint Research CEO Tarun Pathak said that, as the price of memory chips continues to rise, mobile phone companies are striving to reduce costs. Local production can help reduce import pressures in the long term. At the same time, the weakening of the Indian rupee has increased the cost of imported components, further motivating companies to seek local suppliers.
TechCrunch also believes that India has demonstrated its ability to handle more manufacturing orders by leveraging Apple's supply chain. However, the next challenge is whether it can attract more component manufacturers to set up operations, enhance R&D and engineering capabilities, and expand into higher-value segments.
Reuters previously reported that India's electronics manufacturing policy is shifting from expanding the production of complete devices to developing a domestic component industry and a network of suppliers. This also indicates that relying solely on the assembly of mobile phones is insufficient to establish a truly competitive electronics manufacturing system.
Several Indian local financial media also pointed out the country's industrial weaknesses. The Financial Express reported that while India's electronic exports continue to grow, high-value components such as chips, displays, camera modules, and production equipment still rely heavily on imports, with a particularly prominent dependence on Chinese supply. The Economic Times also noted that India's manufacturing policy has shifted from simply expanding the assembly of mobile phones to supporting upstream supporting industries, essentially addressing the reality of broken local industrial chains.
India is now trying to build not just several production lines, but a network of suppliers, a system of engineering talent, and an accumulation of manufacturing experience that surround these production lines. The advantages of Made in China do not come from a single company or factory, but from an industrial ecosystem that has developed over decades.
What India wants to replicate is not just one factory in China, but the industrial networks that have been built behind those factories over decades. This is far from easy to achieve.
