India Targets Broader Tech Production as Apple and Google Weigh Manufacturing Expansions
India expects Apple to widen its manufacturing operations beyond smartphones, while Google could shift a significant volume of export-focused device manufacturing from China to India, according to Union Minister for Electronics and Information Technology Ashwini Vaishnaw. The statements follow the central government’s notification of a Rs 62,500-crore Mobile Phone Manufacturing Scheme designed to scale domestic production, advance local component sourcing, and build domestic hardware brands.
What Happened
Electronics and IT Minister Ashwini Vaishnaw announced that Apple is positioned to broaden its Indian manufacturing ecosystem into other hardware product segments, leveraging the operational footprint already established through iPhone assembly. Alongside Apple’s potential expansion, Vaishnaw noted that India could serve as a primary export manufacturing hub for Google as the company diversifies its supply chains away from China.
The announcement coincided with the government formally notifying the Rs 62,500-crore Mobile Phone Manufacturing Scheme. The new program replaces the previous production-linked incentive framework for large-scale electronics manufacturing, aiming to enhance global competitiveness and deepen domestic supply chains across the sector.
Key Highlights
- New Financial Framework: The Rs 62,500-crore policy provides qualifying manufacturers with incentives between 2.25 percent and 5 percent on eligible sales.
- Component Localisation Bonuses: Companies can access an additional incentive of up to 1.5 percent for sourcing specified parts domestically, including display modules, camera modules, enclosures, batteries, and USB cables.
- Dedicated Track for Domestic Brands: Indian smartphone brands are eligible for a 5 percent baseline incentive on eligible sales, accompanied by an extra 3 percent incentive earmarked for Indian design and research and development.
- Government Collaborations: The government is currently collaborating with three Indian enterprises to engineer best-in-segment device designs over the next 10 to 14 months, initially targeting high-volume price tiers.
- Decade of Export Growth: According to Electronics and IT Secretary S Krishnan, mobile phone exports increased 166-fold between 2014 and 2025, reflecting a compound annual growth rate of roughly 59 percent.
- Manufacturing Milestones: India stands as the world’s second-largest mobile phone manufacturer by volume. Smartphones grew into India’s single-largest exported product category in 2025, with mobile phones generating approximately 61 percent of total electronics exports and 48 percent of total electronics manufacturing output.
Why This Matters
The updated scheme reflects an intentional policy shift from basic device assembly toward deeper domestic value addition. S Krishnan explained that mobile devices have grown from representing roughly 4 percent of India’s electronics exports in 2014-15 to 61 percent in the past year, while their proportion of domestic electronics production surged from about 10 percent to 48 percent.
Saurabh Agrawal, tax partner at EY India, noted that structuring incremental incentives against a moving baseline while offering rewards for domestic parts will materially deepen local value addition and bolster India’s standing as an international mobile export hub.
What to Watch Next
Over the next 10 to 14 months, the Ministry of Electronics and Information Technology will work alongside three domestic manufacturers to complete development of new mobile device designs. Industry observers will also watch for official manufacturing expansion plans from Apple into additional hardware segments and potential relocation steps by Google for export-focused device lines.
Frequently Asked Questions
What are the incentives under the new mobile manufacturing scheme?
Eligible manufacturers can receive baseline sales incentives ranging from 2.25 percent to 5 percent, with up to an additional 1.5 percent for sourcing key components locally, such as camera modules, displays, batteries, enclosures, and USB cables.
What specific incentives are offered to Indian smartphone brands?
Indian smartphone brands qualify for a 5 percent incentive on eligible sales, along with an extra 3 percent incentive to support domestic design and R&D activities.
What hardware categories might Apple produce in India?
While the electronics minister indicated that Apple could expand its manufacturing ecosystem into other hardware lines beyond iPhones, specific additional hardware categories have not yet been named.
Source: timesofindia.indiatimes.com