TaxTMI 
TaxTMI 
TaxTMI 
1. Introduction
Mobile phones have become ubiquitous globally. For many developing-economy manufacturing strategies, mobile-phone production offers a pathway to electronics-manufacturing scale, export orientation, employment and technology spill-overs. India, historically a large importer of mobile handsets, initiated the Make in India initiative in 2014 and later complemented it with a targeted PLI scheme for large-scale electronics manufacturing. Under these policy frameworks, India has witnessed a rapid rise in both production and exports of mobile phones.
The aim of this paper is to analyse how India achieved this transition—from import dependency to export-oriented manufacturing—and to assess the prospects and challenges for further expansion. In particular, the paper addresses three research questions: (1) What have been the key policy and market drivers of India’s growth in smartphone exports? (2) What is the current export performance and global ranking of India’s mobile manufacturing sector? (3) What are the structural challenges and strategic imperatives to sustain and upgrade exports of “Made in India” smartphones?
The remainder of the paper is organised as follows. Section 2 reviews the policy and market context. Section 3 presents empirical evidence of manufacturing scale-up and export performance. Section 4 analyses structural challenges and value-chain issues. Section 5 discusses future prospects and policy implications. Section 6 concludes.
2. Policy and Market Context
2.1 “Make in India” and the PLI scheme
The Make in India initiative was launched to promote manufacturing in India and reduce import dependence across sectors. Within electronics, the PLI scheme specifically targets large-scale electronics manufacturing including mobile phones. This scheme provides financial incentives to manufacturers that meet incremental domestic value addition and export targets. The scheme has been credited for attracting major global brands and contract manufacturers into India.
2.2 Global value chains and smartphone manufacturing
Smartphone manufacturing globally is deeply integrated into value chains—components (displays, chips, cameras) are often imported, assembly and testing done in selected hubs, and final products exported worldwide. Developing economies such as Vietnam, China, and now India have competed to host large-scale assembling and export operations. India’s entry into this arena hinges on offering cost-competitive manufacturing, favourable policy, scale, logistics, and export market access.
2.3 Domestic market shift and export orientation
In parallel with export growth, India’s domestic mobile-handset ecosystem also shifted. Ten years ago, a large proportion of handsets used in India were imported; now domestic production covers most of domestic demand, enabling export-oriented capacity to emerge. )
3. Empirical Evidence: Growth, Exports and Ranking
3.1 Rapid production and export growth
· India’s mobile-phone exports have risen spectacularly. From modest values around Rs 1,500 crore (2014-15) to approximately Rs 2 lakh crore in 2024-25.
· Exports in calendar year 2024 reached about US$ 20.5 billion ( Rs 1,77,141 crore), making India the world’s third-largest mobile exporter.
· Smartphones have emerged as one of India’s largest individual export commodities by value.
· In Q1 of FY26, electronics exports (led by mobile phones) rose 47% year-on-year. Mobile phones alone grew by 55% in that quarter.
3.2 Export destinations and value chain integration
Key export destinations include the United States, United Arab Emirates, Netherlands and UK. For example, in FY24 exports to the U.S. were about US$ 5.6 billion. The rise also reflects deeper integration into global value chains—contract manufacturers (e.g., for Apple and Samsung) scaling operations in India.
3.3 Import substitution and domestic value addition
The share of imports in mobile-handset demand has fallen dramatically—from 75% in 2014-15 to 0.02% in 2024-25. Also, research indicates that domestic value addition (DVA) in production has increased—direct DVA rising significantly between 2016-17 and 2022-23.
4. Structural Challenges and Strategic Imperatives
4.1 Component ecosystem and value addition
While scale of assembly has grown, India’s component ecosystem remains comparatively weak. High reliance on imported components, and limited value capture in complex sub-modules are concerns. The International study notes that the Domestic Value Addition in exports remains modest, and upgrading the value chain is critical.
4.2 Cost competitiveness and global competition
India competes with other assembly hubs like Vietnam, Indonesia, and Mexico, which may offer lower labour costs, closer proximity to parts suppliers, or more mature ecosystems. Ensuring cost competitiveness in logistics, power, duties, infrastructure remains important. ICEA has flagged infrastructure, tariffs and logistics as areas needing attention.
4.3 Export vigilance, quality and global branding
As India’s exports scale up, maintaining global quality standards, after-sales service, reputation, and adherence to export control/regulatory regimes becomes important for long-term credibility. Being a significant exporter entails scrutiny; any product failures or supply-chain disruptions may harm the global brand of “Made in India.”
4.4 Sustainability, innovation and upgrading
Manufacturing scale is necessary but not sufficient: innovation in design, higher value models, R&D in components, escalation up the value chain will determine medium-term competitiveness. Investing in R&D, human capital, IP generation, and moving beyond low-end assembly toward high-value design and sub-module manufacturing is critical.
5. Discussion and Policy Implications
5.1 Policies to deepen value-chain integration
To enhance value addition, policy design should focus on component manufacturing (PCBs, camera modules, display modules, batteries), incentivising localisation of strategic sub-modules, and attracting global suppliers to locate operations in India. The success of the PLI scheme shows that targeted incentives can work but must be sustained and complemented with infrastructure and supply-chain development.
5.2 Infrastructure, logistics and economy of scale
Manufacturing hubs should be supported by high-quality infrastructure (ports, power, logistics, connectivity), streamlined duties/levies, ease of doing business, and coordinated state-centre logistics. Reducing time-to-market, improving export logistics, and lowering landed cost will strengthen competitiveness.
5.3 Global market diversification and export strategy
While the U.S. market is a major destination, diversification across geographies (Africa, South Asia, Latin America) can hedge risks, build resilience and enhance India’s role as global smartphone supplier. Export strategies should also include branding and value propositions (premium phones, Indian brands) to move beyond contract manufacturing.
5.4 Sustainable manufacturing and innovation ecosystem
The manufacturing strategy must be integrated with R&D, design capability and human-capital development. India should aim to build its own mobile-phone brands and innovation in design, features tailored to emerging markets, and ecosystem linkages with software, services and accessories. This will transition India from “assembly hub” to “innovation hub.”
6. Conclusion
India’s rise in mobile phone manufacturing and exports under the Make in India and PLI initiatives is a remarkable industrial achievement. From being a net importer of handsets a decade ago, India is now among the world’s leading mobile-exporting nations, with exports crossing Rs 2 lakh crore and smartphone manufacturing emerging as a cornerstone of its electronics manufacturing ambition. The success demonstrates that targeted policy, manufacturing scale-up and global value-chain integration can deliver results.
However, the journey is far from complete. To sustain and upgrade this success, India must deepen component manufacturing and value addition, ensure cost competitiveness, diversify export markets, and build an innovation-driven mobile ecosystem. The policy impetus must shift from assembly scale to value-chain depth and innovation capacity. If managed well, India is poised not only to serve global smartphone markets but also to emerge as a credible global mobile brand and manufacturing hub.