From making iPhones to building the next Apple: Will India's Rs 62K-cr bet pay off?

India's ambitious plan to transform itself into a global leader in smartphone manufacturing has taken a significant step forward with the launch of the Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS). This initiative marks a pivotal moment in the nation's economic strategy, aiming to move beyond mere assembly and toward creating indigenous smartphone brands capable of competing globally. As of FY 2025-26, smartphones have become India’s top exported individual commodity, surpassing even petroleum and gems and jewelry. This achievement underscores the transformative power of the Production Linked Incentive (PLI) Scheme, which was introduced in 2020 as part of the 'Atmanirbhar Bharat' initiative. The PLI Scheme initially focused on boosting domestic manufacturing and reducing reliance on imports. However, its impact on the smartphone sector has been profound. By incentivizing local production and encouraging investment, the scheme catalyzed a surge in both domestic manufacturing and exports. Today, India is the world’s second-largest mobile phone manufacturer by volume, with over 99.2% of phones used domestically being produced within the country. This rapid ascent from having smartphones ranked outside the top 100 exported commodities in 2014 to becoming a key player in global exports highlights the effectiveness of the policy. The success of the PLI Scheme can be attributed to several factors. It spurred the establishment of numerous manufacturing units, expanding the ecosystem from just two in 2014 to more than 300 today. Major companies such as Foxconn, Tata, Samsung, and Dixon benefited significantly from the incentives, driving both production volumes and export capabilities. According to Saurabh Agarwal of EY India, the cumulative value of mobile phone production in India increased dramatically, from Rs 2.14 lakh crore in FY 2019-20 to Rs 5.5 lakh crore in FY 2024-25. This growth reflects the substantial investments and integration with global supply chains facilitated by the PLI Scheme. The current MPMS aims to build upon these achievements by fostering the creation of Indian smartphone brands. The goal is to ensure that all aspects, from design and research and development to component sourcing and final manufacturing, are handled within the country. Electronics minister Ashwini Vaishnaw has expressed confidence that India could establish its first strong indigenous mobile brand by mid-2027. This ambition aligns with Prime Minister Narendra Modi's vision for the 'Make in India' program, which seeks to reposition India as a competitive manufacturing hub, challenging the dominance of countries like China. Apple's growing presence in India further illustrates the country's rising importance in the global smartphone landscape. The tech giant plans to ship most of its iPhones destined for the U.S. from India by the end of the year, reinforcing India's status as a leading supplier of smartphones to the American market. Bloomberg reports indicate that Apple's contract manufacturers contribute approximately three-quarters of India's smartphone exports, highlighting the critical role played by foreign firms in the country's manufacturing boom. As India continues to expand its manufacturing footprint, the challenge lies in transitioning from being a low-cost assembly hub to a center for innovation and brand creation. Success will depend on sustained investment, skilled workforce development, and strategic partnerships with global technology leaders. The coming years will be crucial in determining whether India can achieve its vision of becoming a formidable force in the global smartphone industry.