India’s ₹62,500 crore mobile manufacturing scheme hinges on 15% annual growth
Effective April 1, 2026, the five-year scheme will link incentives to production growth and local value addition. Kotak Institutional Equities says export-focused brands and EMS players are best placed to meet the 15% annual sales-growth hurdle, while majority Indian-owned R&D-led firms can access the TS2 track.
What happened
India mobile phone manufacturing sector · India’s Rs 62,500-crore Mobile Phone Manufacturing Scheme will reward production growth and local value addition.
Key facts
- Rs 62,500 crore
- five-year programme
- Effective April 1, 2026
- 15% annual sales-growth moving baseline
- ~1.8% domestic smartphone volume CAGR in CY2022-25
- ~14% domestic smartphone value CAGR in CY2022-25
- ~24% mobile production CAGR in 2021-26
- TS1 minimum turnover: Rs 10,000 crore in 2025-26
- TS1 annual threshold: Rs 5,000 crore
- TS2 minimum turnover: Rs 1,000 crore in 2025-26
- Indian ownership requirement: more than 51%
Why this matters
The separate tracks and turnover thresholds create partnership and acquisition opportunities around Indian-owned R&D capabilities, local component ecosystems and export-scale EMS capacity.
What to watch
- Final scheme rules defining eligible sales growth, base-year calculations and treatment of exports versus domestic sales.
- Published local value-add thresholds and the list of qualifying components or manufacturing activities.
- TS2 turnover thresholds, ownership tests and R&D qualification requirements for Indian-owned firms.
- Commitments from Apple suppliers, Samsung, Chinese handset brands and major EMS operators on new India capacity.
- India smartphone demand growth, replacement-cycle trends and premiumization, which determine whether domestic volume can meet the 15% hurdle.
- Changes in import duties, component tariffs, trade agreements or export logistics costs that alter localization economics.
- Export-focused brands are likely to lock in multi-year India production and shipment commitments before the April 2026 launch.
- EMS companies will seek deeper localization of mechanics, chargers, batteries, camera modules, PCBs and packaging to improve value-add metrics.
- Retailers may receive more India-made model launches and sharper promotional support as brands pursue volume growth targets.
- Domestic-focused brands may increase online-channel promotions, financing offers and lower-tier-city distribution to defend growth eligibility.
- Global brands may reassess India pricing and export allocation as incentive economics improve relative to other assembly hubs.