New Delhi is rapidly becoming a global hub for electronics manufacturing, particularly in the mobile phone sector, fueled by the Indian government’s Production Linked Incentive (PLI) scheme. Recent data from CareEdge Ratings reveals a remarkable 146% surge in production, climbing from Rs 2.13 lakh crore in Financial Year 2021 to an impressive Rs 5.45 lakh crore in Financial Year 2025. This growth signifies a major step towards India’s ambition of becoming a self-reliant manufacturing powerhouse and a key player in the global supply chain.
The PLI Scheme: A Catalyst for Growth in Electronics Manufacturing
The PLI scheme, launched in 2020, aims to boost domestic manufacturing across 14 key sectors by offering financial incentives to companies based on incremental production. The electronics sector, and specifically mobile phone production, has demonstrably emerged as the scheme’s star performer. This success is further underscored by a substantial USD 4 billion in Foreign Direct Investment (FDI) inflows, with a significant 70% of this capital directed towards PLI beneficiaries.
Mobile Phone Production Takes the Lead
The dramatic increase in mobile phone manufacturing isn’t just about numbers; it represents a shift in India’s economic landscape. Companies are increasingly choosing India as a base for production, attracted by the incentives, a large domestic market, and a growing skilled workforce. This has led to job creation and a reduction in reliance on imports. The growth in mobile phone manufacturing is also contributing to the broader ‘Make in India’ initiative, promoting domestic industries and reducing the trade deficit.
Disbursement & Investment: A Mixed Picture
While the production figures are undeniably positive, the disbursement of PLI incentives has been comparatively slow. The total budgetary outlay for the PLI scheme across all 14 sectors stands at Rs 1.97 lakh crore. However, as of September 2025, aggregate disbursements only reached Rs 23,946 crore – a mere 12% of the total planned outlay.
However, there are encouraging signs of acceleration. Incentive payouts in FY25 reached Rs 10,112 crore, the highest annual disbursement to date. Further disbursements of Rs 19,742 crore are anticipated in FY26. The first half of FY26 (H1FY26) already saw the release of Rs 4,113 crore in incentives, indicating a strong pipeline and continued momentum.
Despite the initial slow pace, cumulative investments under the scheme have reached approximately Rs 2 lakh crore, resulting in incremental production exceeding Rs 18.7 lakh crore as of September 2025. This demonstrates the scheme’s long-term potential and its ability to attract significant investment.
Sectoral Breakdown of PLI Allocations
The government’s strategic focus on key sectors is evident in the allocation of PLI funds. Large-scale electronics manufacturing receives the largest share, with Rs 38,645 crore earmarked for its development. This is followed by automobiles and auto components (Rs 25,938 crore), solar PV modules (Rs 24,000 crore), and advanced chemistry cell (ACC) batteries (Rs 18,100 crore), reflecting a commitment to both traditional industries and emerging technologies.
Here’s a breakdown of allocations to other key sectors:
- IT Hardware: Rs 17,000 crore
- Pharmaceutical Drugs: Rs 15,000 crore
- Bulk Drugs: Rs 6,940 crore
- Telecom: Rs 12,195 crore
- Food Products: Rs 10,900 crore
- Textiles: Rs 10,683 crore
- Specialty Steel: Rs 6,322 crore
- White Goods: Rs 6,238 crore
- Medical Devices: Rs 3,420 crore
- Drone Components: Rs 120 crore
This diversified approach aims to strengthen domestic supply chains and reduce dependence on imports across a wide range of industries.
Government Support and Future Outlook
The success of the PLI scheme is further validated by recent statements from Union Minister for Electronics and Information Technology, Ashwini Vaishnaw. He reported a six-fold increase in electronics production and an eight-fold rise in exports over the past 11 years. Specifically, electronic goods production surged from Rs 1.9 lakh crore in 2014-15 to Rs 11.3 lakh crore in 2024-25, while exports climbed from Rs 0.38 lakh crore to Rs 3.3 lakh crore.
Looking ahead, the future of electronics manufacturing in India appears bright. Continued investment, streamlined disbursement processes, and a supportive policy environment will be crucial to sustaining this momentum. The PLI scheme, while facing initial challenges, is proving to be a powerful tool for transforming India into a global manufacturing hub, particularly in the dynamic and rapidly evolving world of mobile phones and other electronic devices. The government’s commitment to fostering a robust domestic ecosystem will undoubtedly attract further investment and drive continued growth in this vital sector, boosting the Indian economy and creating opportunities for innovation and employment.
