India’s Mobile Manufacturing Boom Enters Its Next Phase: What PLI 2.0 Means for Investors

India’s mobile manufacturing story has moved far beyond basic assembly. Production, exports and the domestic electronics ecosystem have expanded sharply over the past decade, and the government’s new ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS) aims to take the industry into its next phase.

The big question for investors is no longer just “Can India manufacture smartphones?” It is whether India can increase domestic value addition, component manufacturing, exports and Indian-owned technology.

1. India’s mobile manufacturing transformation

India’s domestic mobile-phone production has increased about 33 times over the period highlighted in recent government-linked data, reaching around ₹6.27 lakh crore in FY2025-26. Electronics manufacturing overall has grown roughly sevenfold to ₹13.11 lakh crore.

The export story is equally significant.

Mobile-phone exports have grown dramatically, making smartphones one of India’s largest export products. The broader electronics sector recorded exports of around ₹4.24 lakh crore in FY2025-26.

This indicates a structural shift:

Import-led market → Local manufacturing → Export hub → Deeper electronics ecosystem

2. What is PLI 2.0?

The new ₹62,500 crore Mobile Phone Manufacturing Scheme is designed to sustain large-scale mobile manufacturing while pushing the industry towards greater localisation and exports.

The scheme is planned for five years and offers incentives linked to manufacturing, sales, exports and domestic sourcing.

The policy is also intended to support the development of Indian smartphone brands, rather than focusing only on contract manufacturing for global brands.

3. The biggest change: localisation

PLI 1.0 helped establish India as a major smartphone manufacturing base.

But a significant portion of high-value components continued to be imported.

PLI 2.0 therefore places greater emphasis on:

1. Domestic sourcing

2. Component manufacturing

3. Higher value addition

4. Exports

5. Indian brands

6. Technology and design capabilities

The broader policy objective is to move India from being primarily an assembly destination to a deeper electronics manufacturing ecosystem.

4. Which companies could benefit?

The new policy has brought several electronics manufacturing companies into investor focus.

Dixon Technologies

Dixon remains one of the most important names in India's mobile manufacturing ecosystem.

The company was a major beneficiary of the earlier electronics PLI programme and has significant scale in smartphone manufacturing. Analysts have highlighted its scale, localisation capabilities and relationships with major brands as potential advantages under the new scheme.

However, there is an important risk.

More companies are entering the ecosystem, meaning competition could increase. Jefferies specifically highlighted a more competitive environment under the new scheme.

Kaynes Technology

Kaynes is another company attracting attention as India moves deeper into electronics and component manufacturing.

The company has been identified among the companies participating in the broader electronics component ecosystem, including camera-module manufacturing opportunities.

The opportunity for companies such as Kaynes is potentially larger than simply assembling phones: the real value could come from moving into higher-value components and electronics manufacturing.

5. Why exports matter

India cannot depend only on domestic smartphone demand to sustain the next phase of manufacturing growth.

Exports will be critical.

Under the new scheme, companies with scale and export capabilities could have an advantage because the policy is designed to encourage globally competitive manufacturing.

This creates an important investment theme:

Global brands + Indian manufacturing + exports = larger addressable opportunity

6. What could go right?

There are several potential long-term growth drivers.

1. Global supply-chain diversification

Companies are looking for manufacturing alternatives outside China, creating an opportunity for India.

2. Higher domestic value addition

More components being manufactured locally can increase the economic value captured within India.

3. Export growth

India can become a larger manufacturing and export base for global electronics companies.

4. Component ecosystem

Camera modules, displays, batteries, enclosures and other components can create new opportunities beyond handset assembly.

5. Indian brands

The new scheme also seeks to encourage competitive Indian smartphone brands, potentially creating another layer of growth.

7. What should investors watch?

The headline ₹62,500 crore allocation is significant, but investors should look beyond the headline.

The key metrics to monitor are:

1. Revenue growth
Are companies actually gaining manufacturing volumes?

2. Export growth
Are Indian facilities becoming globally competitive?

3. Domestic value addition
How much of the final product is actually being sourced and manufactured in India?

4. Margins
Does higher localisation translate into better profitability?

5. Capex returns
Are new factories generating attractive returns?

6. Customer concentration
How dependent is a company on a few large smartphone brands?

7. Competition
Will new entrants reduce pricing power and margins?

8. The key risk: PLI does not guarantee profits

Government incentives can accelerate an industry, but they do not automatically create shareholder value.

Companies still need:

• Efficient execution

• Strong customers

• Competitive costs

• High capacity utilisation

• Technology capabilities

• Healthy cash flows

• Disciplined capital allocation

For investors, this distinction is important.

Policy support creates the opportunity. Execution determines who captures it.

9. The bigger investment story

India’s mobile manufacturing journey has already demonstrated that policy support, global demand and private-sector investment can transform an industry.

The next stage could be even more important.

The opportunity is moving from:

Phones assembled in India

to

Components made in India

to

Higher-value electronics designed, manufactured and exported from India.

That transition could create opportunities across the broader electronics manufacturing ecosystem.

Conclusion

India’s mobile manufacturing industry is entering a new chapter.

The ₹62,500 crore Mobile Phone Manufacturing Scheme provides another policy push at a time when global electronics supply chains are being reorganised.

Companies such as Dixon Technologies and Kaynes Technology are among the names investors are watching, but the winners of the next phase will ultimately be determined by scale, localisation, exports, margins and execution.

The most important question for investors is therefore:

Can India move from being a major smartphone assembly hub to becoming a globally competitive electronics manufacturing and technology ecosystem?

The answer could shape the next decade of India's electronics industry.