The Smartphone Production-Linked Incentive (PLI) scheme, launched to transform India into a global manufacturing hub, has achieved remarkable success, significantly contributing to the country's economic growth, exports, and employment generation. Over the past four fiscal years (2021–2024), the scheme has delivered 19 times the revenue compared to its disbursed incentives, showcasing its efficiency and impact.

Exceptional Revenue Growth

According to the India Cellular and Electronics Association (ICEA), the scheme generated US$ 13.03 billion (Rs. 1,10,000 crore) in government revenue against an incentive outlay of just US$ 687.3 million (Rs. 5,800 crore). The revenue was derived from multiple streams, including GST collections, import duties on mobile parts, and components. Specifically, GST revenues alone increased by US$ 5.69 billion (Rs. 62,000 crore) after the tax rate on smartphones was revised from 12% to 18% in April 2020, coinciding with the scheme's implementation.

The scheme also stimulated the production of smartphones and related goods worth US$ 148.71 billion (Rs. 12,55,000 crore), illustrating its role in scaling up India’s manufacturing capabilities.

Driving Exports and Global Recognition

One of the scheme's standout achievements has been its contribution to smartphone exports, which reached an impressive US$ 34.01 billion (Rs. 2,87,000 crore) over the last four years. By the end of 2023, India emerged as the third-largest smartphone exporter globally, with the US becoming the largest destination for Indian smartphones.

Key players such as Apple (through contract manufacturers Foxconn, Pegatron, and Wistron) and Samsung have driven this export boom. Their significant investments and operational expansions underscore the scheme’s success in attracting foreign direct investment (FDI) and creating a globally competitive ecosystem.

Employment Generation: A Pivotal Success

The PLI scheme has created nearly 900,000 jobs, including 300,000 direct jobs and 600,000 indirect jobs, with many roles benefitting women in mid-skilled, blue-collar positions. This makes the scheme a key contributor to employment generation in India, providing opportunities across multiple regions and demographics.

Rising Value Addition in Manufacturing

The scheme has also improved the value addition in India’s smartphone manufacturing sector. Value addition rose from 12% to nearly 20%, driven by increased domestic production of components and assembly processes. This aligns with the government’s goal of enhancing localisation and self-reliance in manufacturing.

Challenges and Indian Participation

While the scheme has predominantly benefitted global giants like Apple and Samsung, only a limited number of Indian companies, such as Dixon Technologies, have successfully met their incentive targets. The government aims to address these gaps by encouraging greater participation from domestic manufacturers.

Conclusion and Future Outlook

The smartphone PLI scheme has undoubtedly positioned India as a global leader in smartphone production and exports, while significantly bolstering government revenues and job creation. With its robust framework and continued industry support, the scheme is expected to drive further growth, enhance India’s export capabilities, and attract more foreign investments in the coming years.

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