India is preparing for a major leap in its electronics manufacturing ambitions, with the proposed Production-Linked Incentive (PLI) 2.0 scheme expected to significantly boost the country’s global position in smartphone production. The latest development suggests that India aims to capture up to 35 percent of global mobile manufacturing output by FY31, nearly doubling its current share of around 15 percent.
The move comes as the first phase of the PLI scheme concludes, prompting industry leaders to push for an upgraded policy framework that can sustain growth momentum. With global supply chains undergoing realignment and companies seeking alternatives to traditional manufacturing hubs, India sees a strategic opportunity to strengthen its foothold.
The proposed PLI 2.0 plan is not just about scaling production but also about deepening domestic value chains, boosting exports, and attracting large-scale investments. This development holds significance not only for India’s economic growth but also for its ambition to become a global manufacturing powerhouse in electronics.
India’s electronics industry is actively advocating for the rollout of the next phase of the Production-Linked Incentive scheme, widely referred to as PLI 2.0, which is expected to run from 2026 to 2031. The proposal has been submitted to the Ministry of Electronics and Information Technology as part of a broader roadmap to accelerate the country’s manufacturing capabilities.
Under the proposed framework, India aims to increase its share in global smartphone production to between 30 and 35 percent by the end of the decade. This would mark a significant jump from the current contribution of roughly 15 percent, reflecting the rapid expansion of the country’s electronics ecosystem over the past few years.
Industry estimates suggest that annual mobile phone production could reach between USD 110 billion and USD 130 billion by FY31. Exports are also projected to rise sharply, potentially touching USD 55 billion to USD 70 billion annually. These figures indicate a strong growth trajectory, positioning India as a key player in global electronics manufacturing.
The original PLI scheme, launched in 2020, played a crucial role in transforming India into one of the world’s fastest-growing smartphone manufacturing hubs. Major global companies, including Apple and Foxconn, expanded their operations in India under the scheme, significantly boosting production capacity.
By March 31, 2026, the first phase of the PLI program officially concluded. During its tenure, India witnessed a surge in mobile phone exports and a steady increase in domestic value addition. However, industry stakeholders argue that continued policy support is essential to maintain this momentum and compete with established manufacturing giants.
The proposal for PLI 2.0 has received strong backing from industry bodies such as the India Cellular and Electronics Association, which has been at the forefront of advocating for policy continuity.
According to industry experts, India is at a critical juncture where it can either consolidate its gains or risk losing momentum to competing nations like Vietnam and China. The success of PLI 1.0 has already demonstrated the effectiveness of targeted incentives in attracting global manufacturers.
Companies such as Tata Electronics, Google, Dixon Technologies, and Flex are expected to play a crucial role in the next phase of expansion.
Industry leaders emphasize that the next phase must focus on strengthening component manufacturing within India. Currently, a significant portion of high-value components is still imported, limiting the overall value addition in the domestic ecosystem.
Experts believe that for India to achieve its ambitious targets, it must move beyond assembly and focus on end-to-end manufacturing capabilities.
According to a report published by NITI Aayog India needs to enhance its semiconductor ecosystem and invest in advanced manufacturing technologies to remain globally competitive.
Similarly, data released by the Ministry of Commerce and Industry shows that electronics exports have grown significantly in recent years, indicating strong global demand for India-made products.
Analysts also point out that policy stability and long-term incentives will be key to attracting sustained investments from multinational corporations.
The proposed PLI 2.0 scheme is expected to have far-reaching implications for India’s economy. By scaling up production and exports, the initiative could generate millions of jobs across manufacturing, logistics, and allied sectors.
The electronics sector is already one of the fastest-growing segments of India’s economy. With increased production capacity, the country could significantly reduce its dependence on imports while boosting foreign exchange earnings through exports.
From a global perspective, India’s rise as a manufacturing hub aligns with the ongoing diversification of supply chains. Many companies are adopting a “China plus one” strategy, seeking alternative production bases to mitigate risks.
India’s competitive advantages include a large workforce, improving infrastructure, and supportive government policies. However, challenges such as supply chain inefficiencies, regulatory hurdles, and infrastructure gaps still need to be addressed.
Looking ahead, the success of PLI 2.0 will depend on several factors, including policy execution, industry collaboration, and global economic conditions.
Experts believe that if implemented effectively, the scheme could position India as one of the top two smartphone manufacturing hubs globally. The focus will likely be on increasing domestic value addition, expanding component manufacturing, and fostering innovation.
According to the World Bank emerging economies like India have significant potential to lead the next wave of global manufacturing growth, provided they invest in technology and infrastructure.
The coming months will be crucial as the government evaluates the proposal and finalizes the framework for PLI 2.0. Industry stakeholders remain optimistic that the new scheme will build on past successes and drive the next phase of growth.
The proposed PLI 2.0 scheme represents a pivotal moment for India’s electronics manufacturing sector. With ambitious targets and strong industry backing, the initiative has the potential to transform India into a global leader in smartphone production.
As the country navigates a rapidly changing global landscape, strategic policy interventions like PLI 2.0 could play a decisive role in shaping its economic future. If executed effectively, the scheme could not only boost production and exports but also strengthen India’s position in global value chains.