Centre likely to consider new or extended mobile PLI as incentives window closes

MeitY says component gaps and thin margins persist; industry has sought continuation or redesign of incentives

• Government may extend or redesign mobile phone PLI scheme expiring in March
• Industry seeks continued incentives as margins remain thin and imports persist
• No final decision yet on structure or size of new incentives

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The government is considering an extension or a new version of the production-linked incentive (PLI) scheme for mobile phone manufacturing, as the current Rs 40,995 crore programme is set to expire in March, a senior official told Mint.

A final decision on the structure or size of incentives has not been taken, Ministry of Electronics and IT secretary S Krishnan said in an interview, according to the report.

Krishnan said analysis shows “some degree of disability” continues in the mobile electronics ecosystem despite sharp improvement over recent years. He pointed out that the electronics component manufacturing scheme (ECMS) will take at least two years to meaningfully reduce costs.

As a result, cheaper imports and supply-chain efficiencies expected from ECMS will not kick in immediately. Ending the mobile PLI too early, he said, could jeopardise gains made so far.

Launched on April 1, 2020, the mobile phone PLI offered incentives of 4–6% on incremental sales of locally made devices. With an outlay of Rs 40,995 crore over six years, it accounted for about 20% of the Centre’s Rs 1.97 trillion PLI allocation across 14 sectors.

The government has disclosed investments and production linked to the scheme but has not published cumulative incentive payouts since inception.

An RTI response cited by The Indian Express earlier this year showed that between FY22 and FY25, the Centre disbursed about Rs 8,700 crore in incentives. Around 98% went to five firms—Foxconn, Tata Electronics, Pegatron (now owned by Tata Electronics), Samsung and Dixon-owned Padget Electronics.

The scheme helped create large domestic players. Tata Electronics reported Rs 66,601 crore in revenue last fiscal. The broader electronics manufacturing services industry, including Dixon Technologies and Amber Enterprises, reported combined revenue of over Rs 1.25 trillion.

However, margins remain thin, with key components such as chips and displays still imported.

Krishnan said the industry has sought an extension or a redesigned scheme and submitted proposals that are under internal discussion. No final call has been taken.

A government note on July 23 said mobile manufacturing units rose from two in FY15 to about 300 by March 31, 2025. In FY25, India produced electronics worth Rs 11.3 trillion and exported Rs 3.27 trillion, driven largely by incentives for phones and laptops.

Emails sent to Foxconn, Tata Electronics, Dixon and Samsung on a possible extension did not elicit responses to Mint. Moneycontrol could not independently verify the report.