Blitz India Business
NEW DELHI: iPhone exports from India reached about ₹2 trillion in the final year of the production-linked incentive. The scheme that produced that number expired on March 31. Its successor is worth ₹62,500 crore — and its most consequential clause is worth 1.5 per cent.
Start with the terminal figure, because it frames everything that follows. In 2025-26, the last year of the production-linked incentive for large-scale electronics manufacturing, iPhone exports from India were about ₹2 trillion, from a base near zero when the scheme began five years earlier. India’s electronics exports were about $47 billion in calendar 2025, roughly $30 billion of it smartphones, which became the country’s largest single export line by value. In the first quarter of 2025-26 alone, smartphone exports were $7.72 billion, up 58 per cent year on year, with Apple’s contract manufacturers accounting for close to 78 per cent of the total. That concentration is the achievement and the exposure in the same sentence.
Where the value actually sits: the board, the display and the camera module account for most of a handset’s bill of materials. Assembly accounts for very little of it.
In contract electronics, an extra 1.5 per cent of the sale price is not an incentive at the margin. It is roughly the margin.
At a Glance
• iPhone exports, FY26: about ₹2 trillion
• Electronics exports, CY2025: about $47 billion; about $30 billion smartphones
• Smartphone exports, Q1 FY26: $7.72 billion, up 58 per cent
• Apple’s share of that quarter: about 78 per cent
• Old scheme: large-scale electronics PLI, ended March 31, 2026
• New scheme: Mobile Phone Manufacturing Scheme, cleared July 15, 2026
• Outlay: ₹62,500 crore over FY2026-27 to FY2030-31
• Base rate: 2.25 to 5 per cent of eligible sales
• Component-sourcing kicker: up to 1.5 per cent
• Targets: about ₹39 lakh crore of output; about 60,000 direct jobs
The Mobile Phone Manufacturing Scheme, cleared by the Cabinet on July 15, runs five years from 2026-27 and carries ₹62,500 crore. Its base incentive of 2.25 to 5 per cent on eligible sales is the familiar instrument at a lower and differentiated rate. The variation is the additional support of up to 1.5 per cent tied specifically to domestic sourcing of key components and sub-assemblies — a payment for a procurement decision rather than a manufacturing one. For anyone modelling a contract manufacturer’s economics, that clause deserves more attention than the headline outlay. Assembly margins in this business sit in low single digits; a 150-basis-point uplift on the sale price, conditional on where the parts come from, changes the ranking of suppliers in a way that no amount of exhortation has managed to.
The investment question this raises is about the second-order effects. A phone shipped from India counts in full at its export value regardless of where its display, memory, camera module or enclosure were made, so headline export growth and domestic value addition can diverge for years without anyone noticing. The new scheme is an explicit attempt to close that divergence, alongside supply-chain resilience and support for Indian brands with their own design and research. The realistic timetable is long: component plants are capital-heavy, need stable power and water and precision tooling, and are typically built by suppliers following an anchor customer’s commitment rather than a government’s. The scheme’s own arithmetic — about ₹39 lakh crore of cumulative production and roughly 60,000 direct jobs over five years — implies a job created for every ₹65 crore of output, which is a reminder that this remains a capital-intensive industry whose employment case rests on the supplier tiers beneath the assembly line, not on the line itself. Those tiers are precisely what the 1.5 per cent is buying.