The India production-linked incentive (PLI) scheme for mobile phones is showing promising results, as per a report from Bank of America (BofA). The report suggests that India is poised to increase its share of Apple’s global iPhone production, with the mobile phone PLI scheme playing a significant role. Apple has already been increasing its investments in India, and the report indicates that the scheme could drive the Cupertino giant to shift around 18% of its global iPhone production to India by 2025.
The report also highlights the potential for Apple’s vendors to expand their operations in India, further boosting domestic production. This, in turn, could contribute to achieving the target of $126 billion in domestic production and a five-fold growth in exports to $55 billion by 2026, as outlined in the BofA report.
Additionally, the report emphasizes the role of Apple and Samsung as major contributors to the “Make in India” initiative. These companies accounted for approximately 80% of India’s $11 billion mobile phone exports in the fiscal year 2023. Mobile phones constitute a significant portion (21.5%) of India’s electronics domestic demand and are growing at a rate of 15% CAGR. The report acknowledges the success of the mobiles’ PLI scheme and other policies aimed at narrowing India’s production cost gap compared to its peers. It highlights the significant growth in mobile phone production and exports since fiscal year 2017, with production and exports increasing by 3.9 times and 65 times, respectively, while imports have decreased significantly.
The report concludes by expressing confidence that India can achieve its ambitious targets of tripling domestic production and quintupling exports by 2026, which could help foster a robust vendor ecosystem. It emphasizes the importance of policy stability, labor productivity, and last-mile connectivity as crucial factors to monitor in this trajectory.
