India Defends Mobile PLI Plan

Indian Minister Ashwini Vaishnaw has defended the government's Production Linked Incentive (PLI) scheme for mobile manufacturing, citing significant tax collections and job creation. The government has paid Rs 19,000 crore in incentives under the PLI scheme, while direct tax collections from the mobile manufacturing sector have reached Rs 25,000 crore and GST collections have reached Rs 3 lakh crore.

The electronics manufacturing sector in India employs 25 lakh people, with the mobile manufacturing sector alone accounting for 12 lakh jobs. The government plans to continue its push through the Mobile Phone Manufacturing Scheme, which has a budgetary outlay of Rs 62,500 crore and will run from financial year 2026-27 to 2030-31.

The scheme provides incentives ranging from 2.25% to 5% on eligible mobile phone sales, with manufacturers able to qualify for an additional incentive of up to 1.5% linked to domestic sourcing of key components and sub-assemblies. Apple, a major beneficiary of the scheme, assembled around 55 million iPhones in India in 2025, a 53% increase from 36 million units in 2024.

## Why it matters The success of the PLI scheme is crucial for India's plans to become a major electronics manufacturing hub. The government's incentive programmes aim to attract manufacturers, encourage investment, and create jobs in a sector long dominated by production hubs such as China. However, critics have questioned the value retained by India when key components are imported from other countries, highlighting the need for the country to move from being primarily an assembly destination to a more comprehensive electronics manufacturing ecosystem.

The government's defence of the PLI scheme comes amidst growing criticism of the country's dependence on imported components and the cost of government subsidies. Minister Vaishnaw's response, which included a sharp message for critics, underscores the government's commitment to the scheme and its goals for the electronics manufacturing sector. As India continues to expand its role in global electronics manufacturing, the success of the PLI scheme will be closely watched by industry observers and critics alike.

## What happens next The Mobile Phone Manufacturing Scheme is set to run for five years, with a significant budgetary outlay and incentives for manufacturers. As the scheme progresses, the government will likely face continued scrutiny over the value retained by India and the impact of the scheme on the country's electronics manufacturing ecosystem. With the sector employing 25 lakh people and generating significant tax collections, the government will be keen to demonstrate the success of the scheme and its contribution to India's economic growth.