India’s mobile manufacturing incentive programme is facing renewed scrutiny after Electronics and IT Minister Ashwini Vaishnaw defended its results using tax collection and employment figures. The government says it paid ₹19,000 crore in incentives under the mobile phone Production Linked Incentive (PLI) scheme, while the industry generated ₹3.25 lakh crore in GST and direct tax collections, according to figures shared by the minister on October 28, 2026.
Vaishnaw’s argument comes amid criticism that subsidies have helped India assemble and export more smartphones without creating a sufficiently deep domestic component ecosystem. Government figures show a substantial expansion in mobile production and exports over the past decade, but questions remain about local value addition, imported components and the extent to which the growth can be attributed directly to incentives. India has now introduced a new ₹62,500 crore Mobile Phone Manufacturing Scheme to continue expanding the sector.
Key Takeaways
- ₹19,000 crore in incentives: This is the payout figure cited by Vaishnaw for the mobile phone PLI scheme.
- ₹3.25 lakh crore in taxes: The minister’s figures comprise ₹3 lakh crore in GST and ₹25,000 crore in direct taxes.
- 12 lakh mobile manufacturing jobs: Vaishnaw cited this employment figure, within a total of 25 lakh jobs across electronics manufacturing.
- Production has expanded: Mobile phone production rose from approximately ₹18,000 crore in 2014–15 to ₹5.5 lakh crore in 2024–25.
- Exports have grown: India exported mobile phones worth around ₹2 lakh crore in FY2024–25, according to government figures reported by the media.
- A new scheme is underway: The ₹62,500 crore Mobile Phone Manufacturing Scheme runs from FY2026–27 to FY2030–31 and aims to deepen domestic manufacturing.
What Did Ashwini Vaishnaw Say About the Mobile PLI Scheme?
On October 28, Vaishnaw shared figures defending the government’s support for mobile manufacturing. He said ₹19,000 crore had been paid as incentives, while the government collected ₹25,000 crore in direct taxes and ₹3 lakh crore through the Goods and Services Tax.
The minister also highlighted the sector’s employment contribution, saying electronics manufacturing employs 25 lakh people, of whom 12 lakh work in mobile manufacturing.
His remarks were a response to a media opinion video questioning the economics of India’s electronics manufacturing strategy. The criticism focused on whether subsidies for assembling finished phones provide sufficient economic benefits when manufacturers continue importing many components.
Vaishnaw’s figures present the government’s case that the sector has generated significant economic activity alongside tax revenue and employment. However, the figures should be understood as the minister’s reported totals rather than a complete independent assessment of the scheme’s net fiscal impact.
Mobile PLI Scheme: Incentives Versus Tax Collections
The main figures cited in the minister’s defence are as follows.
| Indicator | Reported figure |
|---|---|
| Mobile PLI incentive payouts | ₹19,000 crore |
| GST collections cited by the minister | ₹3,00,000 crore |
| Direct tax collections cited by the minister | ₹25,000 crore |
| Combined tax collections | ₹3,25,000 crore |
| Employment in electronics manufacturing | 25 lakh people |
| Employment in mobile manufacturing | 12 lakh people |
Source: Figures attributed to Ashwini Vaishnaw by Moneycontrol and Business Standard.
The reported tax total is about 17.1 times the incentive payout. That comparison helps explain the government’s argument, but it should not be interpreted as a verified return of ₹17 for every ₹1 spent.
Tax collections and incentive payouts measure different things. A proper assessment would need to establish the period covered, the taxes attributable to the relevant activity, the scheme’s additional economic contribution and other public costs. It would also need to account for the possibility that some production and tax revenue would have existed even without the incentive programme.
How India’s Mobile Manufacturing Industry Has Grown
India’s mobile phone manufacturing sector has expanded considerably since the middle of the previous decade.
Government figures reported by Moneycontrol show that mobile phone production increased from approximately ₹18,000 crore in 2014–15 to around ₹5.5 lakh crore in 2024–25. Over the same period, total electronics production rose from about ₹1.9 lakh crore to ₹11.3 lakh crore.
| Indicator | FY2014–15 | FY2024–25 |
|---|---|---|
| Total electronics production | ₹1.9 lakh crore | ₹11.3 lakh crore |
| Mobile phone production | ₹18,000 crore | ₹5.5 lakh crore |
| Electronics exports | ₹38,000 crore | ₹3.3 lakh crore |
| Mobile phone exports | — | ₹2 lakh crore |
Source: Government figures cited in Moneycontrol’s report. Figures are rounded.
The expansion reflects investment by international smartphone brands and electronics manufacturing services companies, alongside government efforts to attract production to India.
Domestic production has also reduced dependence on imported finished phones. Government figures cited in the reports indicate that mobile phone imports represented around 0.02% of domestic demand in FY2024–25, compared with approximately 75% a decade earlier.
However, a reduction in finished-phone imports does not necessarily mean India manufactures all the components used in those phones. Assembly in India can coexist with substantial imports of displays, semiconductors, camera modules, batteries and other parts.
What Is the Main Criticism of the PLI Model?
The central debate concerns the difference between manufacturing a finished product domestically and producing a large share of its value within the country.
Under the PLI model, eligible manufacturers receive incentives tied to specified performance and production conditions. The policy is designed to attract investment, expand manufacturing capacity, create jobs and improve India’s position in global supply chains.
Critics argue that incentives can encourage companies to assemble products in India while continuing to import high-value components. If domestic suppliers do not develop at the same pace, the country may capture less economic value than headline production and export figures suggest.
The government’s response is that establishing large-scale manufacturing is a step toward building a wider ecosystem. As production expands, suppliers may have stronger incentives to invest locally, develop capabilities and serve both Indian and international markets.
Both the scale of production and the depth of domestic sourcing therefore matter. Production and exports show the size of the industry, while domestic value addition helps indicate how much of the finished product’s value is created inside India.
Why Domestic Value Addition Matters
Domestic value addition measures the portion of a product’s value created within the country, rather than imported inputs and components.
For mobile phones, deeper localisation could include producing more components domestically, developing local suppliers, expanding design and engineering capabilities and increasing research and development activity.
The government has previously reported progress in domestic value addition under the large-scale electronics manufacturing PLI programme. An external evaluation cited by the Ministry of Electronics and IT put domestic value addition at 23% in FY2023–24.
That figure provides a useful reference point, but it does not mean every phone manufactured in India has the same domestic content. The percentage can differ by product, manufacturer and supply chain.
Higher domestic value addition could help India capture more economic value from each phone produced. It could also improve supply-chain resilience, although developing competitive component manufacturing requires investment, skilled workers, technology and reliable access to materials.
India’s New ₹62,500 Crore Mobile Phone Manufacturing Scheme
The earlier Production Linked Incentive Scheme for Large Scale Electronics Manufacturing ended on March 31, 2026. The government has introduced a new Mobile Phone Manufacturing Scheme to sustain growth and deepen domestic manufacturing.
The scheme has a budgetary outlay of ₹62,500 crore and runs from FY2026–27 to FY2030–31. According to the Press Information Bureau, it is designed to expand manufacturing capacity, encourage local sourcing and support Indian-owned mobile brands.
Its main features include:
- Incentives ranging from 2.25% to 5% for eligible mobile phone manufacturing.
- Additional incentives of up to 1.5% linked to domestic sourcing of key components and sub-assemblies.
- A separate segment supporting eligible Indian mobile brands.
- Additional support for qualifying Indian design and research and development activities.
The government expects cumulative mobile phone production of approximately ₹39 lakh crore over the scheme’s tenure and around 60,000 direct jobs. These are programme targets and projections, not completed outcomes.
The new scheme’s emphasis on local sourcing and Indian brands signals that policymakers want to move beyond expanding assembly capacity toward a more deeply rooted domestic industry.
The Bigger Picture
Vaishnaw’s defence of the mobile PLI scheme highlights a wider policy question: how should India measure the success of industrial subsidies? Tax collections, investment, production, exports and employment provide important evidence, but none alone captures the full economic impact. A balanced assessment also needs to consider domestic value addition, import dependence, the quality and durability of jobs, and whether the same results could have been achieved at a lower public cost.
The new Mobile Phone Manufacturing Scheme will provide another test of India’s strategy. Its long-term results will depend on whether incentives help develop competitive component suppliers, design capabilities and Indian-owned brands, rather than simply increasing the number of phones assembled locally. Those outcomes will take time to assess against the scheme’s stated targets.
FAQs
1. How much has India spent on the mobile PLI scheme?
Ashwini Vaishnaw cited ₹19,000 crore in incentive payouts under the mobile phone PLI scheme on October 28, 2026.
2. How much tax revenue did the minister say the industry generated?
Vaishnaw cited ₹3.25 lakh crore in combined tax collections: ₹3 lakh crore in GST and ₹25,000 crore in direct taxes.
3. How many people work in India’s mobile manufacturing industry?
The minister cited 12 lakh jobs in mobile manufacturing and 25 lakh jobs across the broader electronics manufacturing sector.
4. Why is the mobile PLI scheme being criticised?
Critics question whether subsidies for mobile manufacturing create enough domestic economic value when many components continue to be imported. The debate focuses on local sourcing, value addition and the cost-effectiveness of government incentives.
5. What is India’s new Mobile Phone Manufacturing Scheme?
It is a ₹62,500 crore programme covering FY2026–27 to FY2030–31. It aims to expand production, deepen domestic value addition, strengthen supply chains and support Indian mobile brands.
Looking Ahead
India’s mobile manufacturing policy is moving into a new phase following the end of the original large-scale electronics PLI programme. The new scheme’s focus on domestic sourcing and Indian brands will be important indicators of whether the country can capture more value from its expanding production base.
For policymakers and industry, the key question is no longer only how many phones India can manufacture or export. It is also how much technology, component production, skilled employment and long-term industrial capability can be built around that manufacturing activity. Future assessments will need to compare those outcomes with the public money committed to the programmes.
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