India is gearing up to introduce a fresh set of incentive policies aimed at bolstering smartphone manufacturing within its borders. Serving as the second installment of the mobile phone manufacturing initiative, this new policy will tie subsidies directly to both export volumes and the percentage of locally sourced components employed in production. The existing 'Production-Linked Incentive Scheme' is slated to conclude on March 31.

At present, Apple's contract manufacturers constitute roughly three-fourths of India's mobile phone export landscape. Moreover, Apple has outlined plans to relocate the majority of its iPhone production earmarked for the United States to India by the year's end. Presently, smartphones in India have predominantly achieved local assembly, with the initial phase of the policy successfully catering to domestic market needs.

The government's subsequent objective is to elevate the proportion of locally added value, motivate Chinese brands to ramp up their export activities, and allocate subsidies based on varying tiers of local value addition. Nevertheless, India continues to grapple with supply chain hurdles, as critical components remain heavily reliant on imports. Through this policy, the government aspires to transition beyond a mere assembly-centric model, integrate more deeply into the global supply chain, and vie with China for the prestigious title of a global manufacturing powerhouse.