The government’s incentive scheme for mobile phones has been one of the most efficient of all production-linked incentive (PLI) schemes, NITI Aayog said in a report released on Thursday.
The report, prepared with the Indian Institute of Management, Ahmedabad, also said the PLI scheme for IT hardware, which covers laptops, tablets, PCs and servers, is still in its early stages, following a failed first version and a redesign that cost “valuable time”. It reviewed 14 PLI schemes up to March 2026.
What the report found
The large-scale electronics scheme is one of only four sectors rated "on track" on all four measures - investment, production, jobs and exports. It brought in ₹20,580 crore of investment and production worth ₹11.61 lakh crore, and created 1.69 lakh jobs, the report said.
The report added that the government paid ₹19,091 crore in incentives, about 56% of the scheme’s ₹34,193 crore outlay, more than half of all PLI money paid across the 14 sectors.
Mobile phone exports rose almost nine-fold, from ₹22,868 crore in FY21 to about ₹2 lakh crore in FY25. Phone imports fell 77% over the same period. The number of phone factories grew from 2 to about 300. Nearly all phones sold in India (99.2%) are now manufactured here, the report said.
But the report also points to weaknesses. India’s growth has rested largely on assembling imported displays, batteries and circuit boards, it said, adding that the scheme did not require companies to use local parts. In the domestic phone segment, imports remain much higher than exports, according to the report, and a large share of the benefits accrued to major global manufacturers.
{{/usCountry}}But the report also points to weaknesses. India’s growth has rested largely on assembling imported displays, batteries and circuit boards, it said, adding that the scheme did not require companies to use local parts. In the domestic phone segment, imports remain much higher than exports, according to the report, and a large share of the benefits accrued to major global manufacturers.
{{/usCountry}}The part of the scheme meant for electronic components made only “relatively modest progress”, the report said. Its gains peaked around 2022 and then declined, and only one firm received incentives. Production under the scheme also fell in 2025-26, the report noted, though it stayed above 50% of the target.
The report added that gaps in import data, and the IT ministry’s position that production and exports are “market-driven”, made it hard to tell how much of the growth came from the scheme.
IT hardware scheme
Only four companies have received incentives under the IT hardware scheme so far, totalling ₹98 crore, or 0.57% of its ₹17,000 crore outlay, according to the report. Up to March 2026, the scheme brought in ₹908 crore of investment and production worth ₹21,853 crore, and created 4,859 jobs, the report said.
It rated the scheme on track for production and jobs, but gave investment only a “partial impact” rating. The report said data on exports was not available.
The report says the first version of the scheme “did not achieve the intended outcomes”. It offered incentives of only about 2% on average, too little to persuade global firms to move manufacturing to India. Its local-content rules were also too strict for an industry that still lacks parts such as circuit boards and memory chips.
Production fell sharply after 2022 when 13 of the 14 companies moved to the new version, and most took a one-year break to set up. It recovered in 2024-25, when 25 of the 27 approved companies began work.
The government has already replaced the phone scheme. Its tenure ended on March 31 this year, and the Cabinet approved a ₹62,500-crore Mobile Phone Manufacturing Scheme in July.
The new scheme aims to increase the use of Indian-made parts and to build Indian phone brands.