PLI Scheme Struggles with Underutilized Mobile Manufacturing Capacities

Up to half of the mobile phone manufacturing capacities developed since the government initiated its local manufacturing effort via the production-linked incentive scheme are currently underutilised or repurposed for other products due to low demand both globally and locally, according to industry leaders and market analysts.

Utilization rates are elevated for manufacturers exporting in significant quantities and participating in the PLI scheme, while smaller companies focused primarily on the domestic market are converting a substantial portion of their assembly lines to produce items such as telecom devices and wearables, they noted. They noted that underutilisation has remained elevated since 2022, as the pent-up demand from post-Covid began to fade.

As per Counterpoint Research, India's yearly mobile phone manufacturing capability exceeded 500 million units by the conclusion of 2024. This encompassed the ability to manufacture smartphones, feature phones, and tablets. The Electronic Industries Association of India (ELCINA) presents a more cautious estimate of 400-420 million units.

However, approximately 250 million mobile phones are produced annually in India, as reported by Counterpoint and the industry association.

Out of these, 200 million smartphones and feature phones cater to the domestic market, while the remainder, mainly iPhones, are sent abroad. The mobile phone production in India is mainly influenced by PLI-eligible manufacturers including Dixon Technologies, Samsung Electronics, Tata Electronics, and Hon Hai (Foxconn). Nonetheless, companies like Lava International, Karbonn, Bhagwati (Micromax), Bharat FIH, and UTL Neolync have fallen short of the production targets.