India targets deeper smartphone component manufacturing with ₹62,500 crore incentive scheme
India is pushing smartphone production beyond final assembly into batteries, PCBs, displays, graphite and electrolyte additives. The Mobile Phone Manufacturing Scheme will offer 2.25%–5% incentives from FY2026-27, while ATL plans a ₹3,000 crore battery-cell facility in Manesar.
What happened
India smartphone manufacturing sector · India is expanding smartphone production beyond final assembly into batteries, graphite, electrolyte additives, PCBs,
Key facts
- 330 million phones manufactured annually
- 99.2% of mobile phones sold in India were domestically made in FY2023-24
- 26% domestically made a decade earlier
- ₹3,000 crore ATL battery-cell facility investment
- ₹62,500 crore Mobile Phone Manufacturing Scheme
- 2.25% to 5% manufacturing incentives
- FY2026-27 to FY2030-31
Why this matters
Component makers and global OEMs have a clearer case for Indian joint ventures, acquisitions and supplier partnerships as incentives shift the market from final assembly toward a more vertically integrated ecosystem.
What to watch
- Final scheme guidelines, eligibility thresholds, domestic value-add definitions and disbursement timing for FY2026-27.
- Committed versus operational capacity announcements for cells, PCBs, displays, graphite and electrolyte materials.
- Anchor purchase agreements from major OEMs such as Apple suppliers, Samsung, Xiaomi, Oppo, Vivo and Indian brands.
- Changes in import duties on components, finished smartphones, minerals and production equipment.
- Local component yield, quality certification and warranty-return rates versus imported alternatives.
- Retail smartphone ASP trends, stock-out frequency and promotional intensity in India’s sub-₹20,000 and mid-premium segments.
- Increase sourcing discussions with India-based battery-pack, PCB and charger suppliers for private-label accessories and refurbished-device operations.
- Model lower inventory buffers for India-made smartphone SKUs if local component capacity shortens replenishment cycles.
- Seek multi-year supply agreements with OEMs that include allocation protection, quality thresholds and price-reset clauses tied to localization milestones.
- Expand merchandising around India-manufactured phones, accessories and trade-in programs if brands use local production to support sharper promotional pricing.
- Monitor whether component localization enables more India-specific configurations, faster repair parts availability and stronger after-sales service margins.