India Targets Global Supply Chains with New Mfg. Policy

India is preparing a new round of incentives for smartphone manufacturing, designed to boost exports and the domestic production of components. This initiative aims to integrate India more profoundly into global supply chains and challenge China's dominance in manufacturing. The policy will reward companies for shipping devices overseas and for using more locally sourced parts and sub-assemblies.

This strategic shift, moving beyond basic assembly, prioritizes higher value addition in electronic devices. It encourages brands like Apple and Samsung, whose contract manufacturers already drive a significant portion of India's smartphone exports, to further enhance local sourcing. The government also seeks to encourage Chinese brands to use India as an export base.

The new incentive structure is still under finalization but emphasizes localization, offering greater benefits for devices with a higher percentage of Indian-made components. While India has succeeded in attracting large-scale assembly, developing a deep supplier base for high-value parts like semiconductors remains a challenge.

This policy evolution is a natural progression of India's 'Make in India' program, aiming to transition from import substitution to becoming a formidable global manufacturing hub. The incentives are expected to complement existing schemes focused on electronic component production, with companies like Dixon Technologies already forming joint ventures for display module manufacturing.