India's Electronics Industry Proposes New Expansion Plan Post-PLI Scheme
With the current production-linked incentive (PLI) scheme concluding, India's electronics sector has presented a comprehensive expansion strategy to the government, seeking sustained support to dramatically increase manufacturing and exports over the next five years. During recent discussions with the Ministry of Electronics and Information Technology (MeitY), industry representatives outlined ambitious targets that could position India as a dominant global player in mobile phone production.
Ambitious Targets for Global Mobile Production Share
The industry projects that by the fiscal year 2031, India could capture 30–35% of global mobile production, a significant leap from the current approximately 15% share. This expansion would translate to annual manufacturing output reaching $110–130 billion, with exports estimated between $55–70 billion. Currently, India's mobile phone manufacturing output exceeds $64 billion, demonstrating substantial growth potential.
Industry executives emphasize that the existing PLI scheme, which concludes on March 31, has been instrumental in driving this growth trajectory. "With a strong foundation, we have an opportunity to achieve 30-35% of global mobile production in the next five years," stated Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA). "To realise this ambition, it is critical to sustain the current momentum and continue investments."
Proposed PLI 2.0 Scheme and Government Considerations
Discussions are actively underway regarding a proposed PLI 2.0 scheme, likely to be implemented from 2026 to 2031. Government officials have confirmed that a new incentive program is under consideration, though specific details remain unfinalized. The industry has submitted a detailed roadmap to the government outlining strategies to meet the production and export targets by FY31.
Industry leaders argue that increasing India's global manufacturing share would deliver multiple benefits:
- Strengthening domestic supply chains
- Deepening the manufacturing ecosystem
- Supporting large-scale research and development initiatives
One executive highlighted that "scale is more important than value addition alone for long-term sustainability," suggesting a focus on volume production alongside value creation.
Export Focus and Market Challenges
Experts note that future production growth will depend heavily on exports, as domestic demand faces potential weakening. India's smartphone market could contract by more than 13% this year due to rising memory costs, potentially driving device prices up by 15–40%.
Recent trade data reveals promising export trends:
- Smartphone exports surged 47.4%, from $20.44 billion in 2024 to $30.13 billion in 2025
- The United States accounted for $19.7 billion, representing 65% of total exports
- China's smartphone exports declined from $132.6 billion to $120.6 billion during the same period
However, India faces competitive challenges. While China's shipments to the US declined sharply due to fentanyl-related tariffs, China maintains advantages through its robust supply chain and advanced manufacturing capabilities. India's tariff advantage in the US market has also narrowed following the US Supreme Court's rejection of sweeping global tariffs imposed by the previous administration.
Government Evaluation and WTO Compliance
The government is carefully examining several critical factors for any new incentive program:
- Appropriate levels of domestic value addition required for incentives
- Strategies to increase exports without violating World Trade Organization norms
- Balancing scale expansion with sustainable development of manufacturing capabilities
Industry representatives remain actively engaged with government stakeholders to shape what they describe as "the next phase of this growth journey." The proposed expansion plan represents a strategic push to transform India from a significant regional manufacturer into a global electronics powerhouse over the coming decade.
