From Washington to Brussels, Tokyo to Seoul, governments are working extensively to attract factories, secure supply chains and reduce strategic dependence. The success of the Smartphone Production-Linked Incentive (PLI) Scheme, which is giving wings to the electronic manufacturing sector in India, is not hidden from anyone today. From Apple’s iPhone to the world’s top brands, today they are running their manufacturing units in India. This runway success of the smartphone PLI is not only boosting the country’s exports but also creating a game-changer blueprint for India’s upcoming industrial policy and other sectors (like semiconductor, EV, and pharma). Let us understand what are the key lessons for India from this historic success of smartphone PLI:
India becomes hub of phone manufacturing
The bitter truth is that most of the industrial policies look great when launched, but in reality they do not deliver the expected results. According to the Economic Times, it is important to pay attention to India’s smartphone PLI scheme, in 5 years it has transformed India from a major consumer market to one of the most important smartphone manufacturing and export hubs in the world.
More importantly, it brought a large part of Apple’s ecosystem to India, one of the world’s most advanced, demanding and closely managed GVCs (Global Value Chains). This success was built on three pillars: thoughtful design, consistent execution and results that exceeded expectations.
Design: PLI worked because of the clarity of objective. The plan had three objectives, to attract GVCs, to reduce India’s costs relative to competing manufacturing destinations, and to expand exports. That clarity allowed policymakers to design incentives tailored to outcomes rather than optics.
Payment was linked to certain measurable parameters such as value of product, extent of investment and additional production. Other targets like exports, employment and value addition were kept in mind but were not included in the terms of payment. Many policy schemes fail because they impose multiple and sometimes contradictory objectives on the same approach. Instead of including everything in the smartphone PLI scheme, the focus has been on a fixed scope.
A decision was taken to work on a large scale (back-scaling) under this scheme. Unlike the previous government, which provided support in many areas without any major structural changes, PLI provided incentives only to select and serious global and domestic companies. The lesson from this is that when the objective is to participate in GVCs (Global Value Chain), the policy should promote the ability to work and implement on a large scale rather than just share.
Execution: In industrial policy, it is more important to be trustworthy than generous. Global companies decide on location not only on the basis of incentive rates, but also on whether governments will fulfill their promises or not and how much certainty there will be in work. PLI’s performance in this matter has been good.
Smartphone exports increased due to PLI scheme
consequences: The clearest example of what this scheme achieved is the Apple case study. When Apple’s vendor ecosystem agreed to PLI in 2021, the estimated production was approximately $38.8 billion. Total FOB (free on board) production is expected to reach about $70 billion by FY26, which is about 1.8 times the initial promise. The export target of $33 billion has been exceeded and actual exports are expected to reach $51 billion, which is about 1.5 times the target.
Now iPhone accounts for almost three-fourths of India’s smartphone exports. Their exports are estimated at $23 billion in 2025, which is double the $11.5 billion in 2024. iPhone has now become India’s most exported product. This is a big change in a category, not a minor improvement.
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