Government Prepares Groundwork for PLI 2.0

The government is gearing up to launch the second phase of the Production-Linked Incentive (PLI) scheme for smartphones as the current programme nears its end. According to sources, the new version, called PLI 2.0, aims to sustain India’s export momentum and help local players compete with rivals in China and Vietnam.

The existing scheme, regarded as one of the most successful incentive programmes, has attracted major global manufacturers and turned India into a leading smartphone production hub. However, it will lapse at the end of this fiscal year.

Industry executives argue that without a new scheme, India may fall short of its ambitious target of $500 billion in electronics output by 2030.

Industry Push for Continuity

Executives from the sector have been in discussions with the Ministry of Electronics and Information Technology (MeitY), stressing the urgent need for a fresh scheme. While officials acknowledge the importance of policy continuity, formal consultations on the PLI 2.0 framework are yet to begin.

A government source said, “We are willing to look at all aspects, but there is no concrete proposal on the table yet.”

Industry leaders fear that a policy vacuum could derail India’s growing position as a global smartphone hub, particularly as exports have risen sharply every quarter since the PLI scheme began.

Smartphone Exports Driving Electronics Growth

Data from the India Cellular and Electronics Association (ICEA) highlights how smartphones have fueled India’s export growth.

• Electronics exports rose from $29.1 billion in FY24 to $38.6 billion in FY25, led by Apple and Samsung.

• In Q1 FY26, exports touched $12.4 billion, up from $8.43 billion in the same quarter last year.

• The mobile phone segment grew 55%, from $4.9 billion in Q1 FY25 to $7.6 billion in Q1 FY26, largely powered by Apple’s strong shipments.

Industry insiders believe PLI 2.0 will be designed specifically to boost smartphone exports further.

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Industry Voices Strong Support

Executives from both global and domestic firms have echoed the need for PLI 2.0. An industry insider said, “The first PLI has been successful but the work is not done yet. There is still time to consolidate gains, hence there is a need for another PLI to support the Android ecosystem.”

One example is Bhagwati Products Ltd, a Micromax group company. Initially struggling to ramp up production, the firm improved performance after Chinese ODM Huaqin acquired a 49% stake in FY25, enabling it to scale output and qualify for incentives.

Rahul Sharma, co-founder of Micromax and owner of Bhagwati Products, also emphasized the importance of a fresh round of incentives. He said, “We would definitely require another round of PLI, and the industry is confident that the government will come up with the same.”

Outlook

With exports booming and India cementing its role as a major handset hub, the push for PLI 2.0 has gained strong momentum. While the government has not yet released a formal proposal, industry players remain confident that support will be extended to ensure India stays on track to achieve its $500-billion electronics output target by 2030.

✅ Key Highlights:

• Government planning PLI 2.0 for smartphones as current scheme ends.

• Aim: sustain exports, boost competitiveness vs China & Vietnam.

• Electronics exports grew to $38.6 billion in FY25; mobile phones lead growth.

• Industry stresses urgent need for continuity to reach $500-billion output target by 2030.