India smartphone manufacturing companies are weighing whether to apply for a new incentive scheme as weak sales, rising component costs and production pressures complicate their plans. The first application window opened on October 15, 2026, while a separate window for smaller manufacturers had not yet been announced as of October 25.
Key Takeaways
- The first application window is open to eligible manufacturers and electronics manufacturing services providers with at least ₹10,000 crore in FY26 turnover.
- One Indian smartphone brand said it was awaiting guidelines for the second target segment before deciding whether to apply.
- Counterpoint Research reported a 20% annual decline in the overall smartphone market.
India smartphone manufacturing applicants assess eligibility
The Mobile Phone Manufacturing Scheme offers incentives to eligible manufacturers, including additional support tied to Indian design and research and development and to domestic component sourcing.
An unnamed Indian smartphone maker said it was waiting for guidelines for the second target segment and seeking more information from policymakers before evaluating an application. An unnamed contract manufacturer said it was applying.
Industry sources expressed concern that companies may struggle to meet eligibility requirements as component prices rise and buying remains weak. One source said the scheme could increase manufacturing capacity without resolving the immediate challenge of managing volumes.
| Item | Details |
|---|---|
| Target Segment 1 | Applications opened October 15, 2026; minimum FY26 turnover of ₹10,000 crore. |
| Target Segment 2 | Minimum FY26 turnover of ₹1,000 crore; application window not yet notified as of October 25. |
| Indian-brand incentive | 5%, plus an additional 3% for Indian design and research and development. |
| Domestic sourcing | An additional incentive of up to 1.5% for key components or sub-assemblies in both target segments. |
Weak sales put production targets in focus
Counterpoint Research said Indian brands’ share of shipments rose from 2% in the third quarter of 2025 to 7%, although the overall market fell 20% year on year. The available figures do not specify the period for the 7% share.
A component supplier to a smartphone maker reported a production decline of at least 10% to 20% in India, without specifying a comparison period. Faisal Kawoosa, founder and chief analyst of Techarc, said lower global volumes could affect companies’ ability to meet scheme targets and that the industry might seek a revision of criteria by the end of December 2026.
Counterpoint research analyst Shubham Singh said incentives linked to revenue targets could help cushion manufacturers’ margins, while local-sourcing incentives could stimulate domestic component demand. Those benefits remain expectations rather than established results.
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