India shifts smartphone push from final assembly to local component manufacturing
With nearly all phones sold domestically now made in India, policy focus is moving deeper into the supply chain. A Rs 62,500-crore component-manufacturing scheme is slated to run from FY2026-27 through FY2030-31, aiming to build local capacity beyond handset assembly.
The development
India reported 99.2 percent of mobile phones used domestically are manufactured locally, as it shifts toward components. ECMS had approved 106 projects across 15 states by August 2026, while a Rs 62,500-crore scheme runs from FY2026-27 to FY2030-31.
The numbers
- 99.2 percent
- 106
- 15
- August 2026
- Rs 62,500-crore
Why it matters to operators and investors
India’s shift from handset assembly to local components creates an opportunity to shorten supply chains and improve resilience, but retailers and electronics brands should expect a multi-year ramp before domestic parts meaningfully reduce costs or import dependence.
The counter-case
India’s move from handset assembly to components is materially harder than the headline implies. Final assembly can scale through tariff arbitrage and labor-intensive operations, but semiconductors, displays, camera modules, batteries, precision mechanics and specialized materials require deep supplier ecosystems, IP, reliable utilities, high yields and globally competitive input costs. Large incentives may attract announced projects without creating cost-competitive output, leaving manufacturers dependent on imported subcomponents or using India primarily for tariff-compliant assembly. The scheme could also increase fiscal cost and supply-chain complexity without reducing consumer prices or meaningfully improving domestic value addition.