Govt mulls fresh sop for India's booming smartphone sector

Discussions are underway between the Indian government and major smartphone makers regarding a new incentive scheme to follow the expiring Production Linked Incentive (PLI) program. Officials are reportedly considering a special exception for the smartphone sector, deviating from the standard practice of offering incentives only once.

This potential exception is driven by evolving market dynamics, including the recent zeroing of fentanyl tariffs on China, which has diminished India's competitive edge. Although the manufacturing cost disparity with China has reduced, it still remains significant, making it challenging for Indian companies to compete without continued government support.

Informal talks have occurred with key players like Foxconn, Tata, Apple, Samsung, and domestic brands. The government aims to avoid derailing a flourishing industry and recognizes that sustained incentives are crucial given China's advanced manufacturing capabilities. Smartphones have become India's leading export category, underscoring the importance of supporting this sector.