As the global electronics landscape continues to evolve, a seismic shift is underway in the industry's power dynamics. India has unveiled a multi-billion-pound plan to challenge China's long-held dominance in smartphone manufacturing, with far-reaching implications for both domestic and international markets. The new incentives, totalling an estimated £5.1 billion, are part of a strategic push to redraw the global electronics supply chain map.
At its core lies the Mobile Phone Manufacturing Scheme, a five-year programme designed to reward smartphone manufacturers based on eligible sales. Incentives will range from 2.25% to 5%, with an additional 1.5% for companies that source key components and sub-assemblies within India. This scheme is complemented by an additional £10.5 billion commitment to strengthen domestic semiconductor manufacturing, expanding a pre-existing programme launched in 2021. The expanded support will cover chip equipment, materials, design, and research.
Over the past decade, India has emerged as a crucial smartphone manufacturing hub, with companies such as Apple assembling iPhones within its borders since 2017. Apple's decision to diversify its supply chain beyond China reflects the strategic significance of this development. The drive is also broadening to include other players, with recent clearance for a smartphone manufacturing joint venture between China’s Vivo and Indian electronics maker Dixon Technologies.
Despite this progress, India faces a considerable challenge in rivalling China's established dominance. According to Counterpoint Research, China accounted for 63% of global smartphone production in 2025, highlighting the extensive manufacturing and supplier ecosystem that New Delhi is striving to develop. The new programme signifies a strategic shift from merely assembling products to focusing on 'depth, R&D and local value capture,' aiming to reduce reliance on imported components.
The government expects the Mobile Phone Manufacturing Scheme to generate an estimated £320 billion in mobile phone production and create about 60,000 direct jobs by its conclusion in March 2031. Beyond incentivising local manufacturing, India also seeks to foster homegrown mobile-phone brands, with the programme including an additional 3% incentive on eligible sales for product design and research specifically aimed at developing Indian brands.