Samsung’s smartphone exports declined by nearly 20% year-on-year in the first quarter of FY26, a drop that industry executives attribute to the South Korean giant no longer qualifying for incentives under India’s production-linked incentive (PLI) scheme for smartphones since April, The Economic Times reported on Monday.
According to the report, the absence of PLI benefits may have eroded Samsung’s export competitiveness, prompting the company to reassess its export strategy. Industry sources told ET that the same situation could unfold for other major beneficiaries of the scheme — Apple and Dixon Technologies — once the PLI window ends in March 2026.
“The combined effect of all three – who have been the flagbearers of the PLI scheme and local manufacturing and exports – has the potential to derail India’s bid to become a smartphone manufacturing hub for global markets,” an industry executive told The Economic Times on condition of anonymity.
Data cited by ET shows that Samsung’s smartphone exports for the June quarter stood at around $950 million, a drop from $1.17 billion in the same period last year, and from $1.2 billion in the previous quarter (January–March).
Experts told The Economic Times that without the PLI, India faces a manufacturing cost disadvantage of approximately 10% compared to Vietnam and 15% against China. Even during the PLI period, the benefit of 4–6% only partly offset these cost gaps. Despite this, brands had been moving production to India and ramping up exports, encouraged by global geopolitical dynamics.
However, the end of PLI incentives could pose a serious threat to India’s ambitions, especially as India, China, and Vietnam compete for favourable trade deals with the US amid the ongoing global shift to a China+1 manufacturing strategy, ET noted.
The report added that the industry has been lobbying the government to extend the smartphone PLI scheme beyond FY26 to maintain export momentum. Smartphone exports from India surged from just $200 million in FY18 to a record $24.1 billion in FY25, ET highlighted.
India has recently rolled out a Rs 22,919 crore components PLI scheme to build on the smartphone PLI's success and boost local value addition. However, ET reports that this initiative, too, could be impacted if companies scale back investments due to cost disadvantages compared to rival manufacturing destinations.
During the PLI regime, Samsung ramped up its smartphone exports from $1.2 billion in FY21 to $4.4 billion in FY25. According to ET, the company is now seeking incentives for the current fiscal year to make up for FY22, when it missed the eligibility targets due to Covid-related disruptions.
Industry executives told ET that Samsung has argued for a one-year extension, citing that other applicants received similar relief under the force majeure clause during Covid. Notably, Samsung was the only participant to meet the PLI targets and receive incentives in the scheme’s first year (FY21).
Samsung had chosen the FY21–FY25 window for its five-year PLI participation, leveraging its existing operations in India. Apple and other participants, in contrast, had to set up new facilities, causing delays during the pandemic. The government, therefore, granted them a one-year extension, allowing companies to claim incentives for any five consecutive years within a six-year span ending FY26, as per The Economic Times.
Apple currently leads India’s smartphone export push, followed by Samsung and Dixon, which manufactures for brands like Google, Motorola, and Xiaomi, the report added.
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