1. Introduction

The move comes at a time when India has emerged as one of the world’s fastest-growing mobile manufacturing destinations. Over the last five years, major global brands and contract manufacturers have expanded their presence in the country, supported by policy incentives, improving infrastructure, and supply-chain diversification away from China. The proposed second phase is expected to build on these gains and target the next level of growth.

2. Origin and Intent

The original Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing (LSEM) was notified on 1 April 2020. It was introduced with a total outlay of ₹40,995 crore to encourage domestic production of mobile phones and specified electronic components. The scheme provided incentives ranging from 4% to 6% on incremental sales over the base year FY2019-20 for eligible companies for five years.

The key objective was to attract large global manufacturers, create scale in domestic production, reduce import dependence, and make India a preferred destination under the global “China Plus One” strategy. Under the scheme, companies such as Apple Inc. suppliers Foxconn, Pegatron, Wistron, and Samsung Electronics significantly increased their manufacturing footprint in India.

The first phase of the scheme is set to conclude in March 2026. As the initial programme nears expiry, industry stakeholders have been seeking either an extension or a successor scheme to sustain momentum. This has led to the proposed Mobile PLI 2.0, which is likely to be more export-oriented and performance driven.

3. Key Amendments

Unlike the first phase, which focused on expanding manufacturing capacity and attracting investments, Mobile PLI 2.0 is expected to place stronger emphasis on exports. Government officials have indicated that the new scheme may be structured to help double India’s mobile phone exports over the next few years.

India’s mobile export performance under the first scheme has already shown strong growth. In 2025, mobile phone exports reportedly touched ₹2.62 lakh crore, equivalent to around USD 28 billion. By February 2026, cumulative exports under the scheme crossed ₹6.2 lakh crore, nearly 27% higher than the original target of ₹4.87 lakh crore.

The new version may also encourage higher domestic value addition by incentivising component manufacturing such as displays, batteries, camera modules, printed circuit boards, and semiconductor packaging. This would help India move beyond final assembly and deepen local supply chains. Final details regarding incentive rates, eligibility norms, and annual targets will depend on Cabinet approval.

4. Impact

If implemented effectively, Mobile PLI 2.0 could significantly strengthen India’s electronics ecosystem. First, it may lead to fresh investments by global smartphone makers and contract manufacturers looking to diversify production bases. Second, it could generate large-scale employment in assembly plants, component units, warehousing, and logistics.

States such as Tamil Nadu, Uttar Pradesh, Karnataka, and Andhra Pradesh are likely to benefit as they already host electronics clusters. Increased exports would also improve India’s trade balance in electronics, a sector traditionally dominated by imports.

Moreover, a stronger domestic supply chain for components can reduce dependence on imports from East Asia and make Indian manufacturing more resilient to global disruptions. This aligns with India’s broader goal of becoming a trusted manufacturing partner in global value chains.

5. Conclusion

The likely rollout of Mobile PLI 2.0 marks an important shift in India’s industrial strategy—from import substitution and assembly-led growth to export-led manufacturing expansion. The first PLI scheme successfully established India as a major mobile phone production base. The next phase now aims to convert that production scale into sustained global competitiveness.

With a proposed outlay of over USD 5 billion, stronger export incentives, and deeper localisation targets, Mobile PLI 2.0 could become a major driver of jobs, investment, and technological capability. If executed well, it may help India emerge as one of the world’s leading mobile phone export centres in the coming decade.