India officially launched a massive multi-billion dollar incentive package on Wednesday, targeting a larger share of the global electronics supply chain. By expanding its semiconductor strategy and introducing the new Mobile Phone Manufacturing Scheme, New Delhi aims to aggressively pivot global production away from China and build on its recent success in assembling Apple’s iPhones.
A Massive Financial Commitment to Tech Dominance
The Mobile Phone Manufacturing Scheme is a five-year, ₹625 billion (approximately $6.5 billion) program that will run through March 2031. It rewards manufacturers with incentives ranging from 2.25% to 5% based on eligible sales, plus an additional 1.5% bonus for sourcing components domestically. Simultaneously, New Delhi committed an additional ₹1.28 trillion (around $13.3 billion) to bolster semiconductor manufacturing, significantly expanding a 2021 chip incentive program to cover equipment, materials, and research.
From Assembly Hub to Global Powerhouse
Over the last decade, India has become a critical manufacturing node for giants like Samsung and Chinese brands such as Xiaomi, Oppo, and Vivo. Apple, which began local iPhone assembly in 2017, has rapidly scaled operations through partners like Foxconn and the Tata Group. With about 25% of its iPhones now produced in India, the Cupertino-based company is at the forefront of the supply chain diversification trend.
The manufacturing momentum is spreading. The government recently approved a joint venture between China’s Vivo and India’s Dixon Technologies and scrapped import duties on specific electronics components, a strategic move designed to lower production costs for global players.
The Challenge of Challenging China
Despite these gains, India faces a significant gap. According to Counterpoint Research, China controlled 63% of global smartphone production in 2025, while India held 18%. Navkendar Singh, associate vice president at IDC, notes that the new program marks a pivot from simple “assembly” to “depth, R&D, and local value capture.”
“Apple stands to benefit directly,” Singh explained, noting that enhanced manufacturing credentials provide the confidence needed for companies to further diversify operations away from China while incentivizing supply-chain partners to localize component sourcing.
Economic Goals and Domestic Ambitions
The government projects that the five-year mobile phone program will generate ₹39 trillion (about $405 billion) in total production value and create 60,000 direct jobs. Tarun Pathak, research director at Counterpoint Research, believes this will help build a sustainable component ecosystem, especially as brands look to “save every cent” amid record-high memory prices.
New Delhi is also pushing for homegrown brands to capture more market value. Indian IT Minister Ashwini Vaishnaw highlighted that the new program includes a 3% incentive for product design and research, aiming to revive local brands that previously lost market share to aggressive Chinese competitors like Xiaomi and Oppo, which now account for much of the domestic market.
Pankaj Mohindroo, chairman of the India Cellular and Electronics Association, argues that India should aim for 35% to 40% of global mobile-phone production. By betting simultaneously on mobile devices and semiconductors, India is attempting to replicate the deep, integrated manufacturing ecosystem that has long defined China’s global dominance. The success of its iPhone assembly boom is clear; the next test is whether the high-value technology and supplier networks will follow suit.
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