Indian political debate has developed a dependable rhythm. The Union government announces a manufacturing incentive; Congress spokespeople discover the perils of corporate favouritism; a plant is proposed in a Congress-ruled state; the local leadership celebrates jobs with a ribbon and several cameras. By the next television cycle, everyone resumes pretending these positions are compatible.
I support the new Mobile Phone Manufacturing Scheme, but not because every subsidy deserves applause. Industrial policy can become an expensive method of moving profits onto the public balance sheet. My support rests on a narrower judgment: mobile manufacturing is one sector where India has already demonstrated scale, export potential and the ability to attract a supplier ecosystem. The sensible response is to move further up the value chain, not to declare victory at assembly.
Assembly was a beginning, not a fraud
The cleverest criticism of Make in India has been that imported parts are being screwed together on Indian soil and marketed as technological sovereignty. There was truth in that criticism, particularly during the early years. But the commentariat turned a stage of industrial development into a permanent verdict. No serious manufacturing economy begins with total domestic value addition. It begins by proving that factories can deliver quality, volume, logistics and policy stability.
The Cabinet’s official announcement gives the new scheme a five-year horizon and explicitly targets components, design, research and Indian brands alongside finished phones. That distinction matters. The policy is no longer satisfied with counting boxes leaving a factory. It is trying to capture more of what is inside the box and more of the intellectual property that determines the margin.
Public reporting has correctly stressed the distance still to travel. TechCrunch’s account of the scheme placed India’s rise beside China’s continuing dominance of global production. I find that comparison useful because it prevents both despair and chest-thumping. India is no longer an irrelevant manufacturing location, but it is nowhere near possessing China’s dense web of tooling firms, component vendors, chemical suppliers and experienced engineers.
The opposition’s error is to treat that gap as proof the journey is fraudulent. If dependence on imported displays, camera modules or machinery invalidates industrial policy, no late-industrialising country could ever start. The proper question is whether each round of incentives purchases additional capability. That can be measured.
Pay for capability, not merely turnover
I would tie the most generous incentives to outcomes that leave something durable behind: local supplier contracts, engineering employment, patents, tooling capacity, export performance and audited domestic value addition. A company receiving public support should not satisfy the state merely by rerouting imports through an Indian assembly line. It should demonstrate that its Indian operation becomes harder to uproot with each passing year.
This is where a pro-government column should resist becoming a government pamphlet. Incentive schemes are vulnerable to gaming. Definitions can be stretched; baseline sales can be massaged; firms can collect benefits for investments they would have made anyway. The answer is not Congress’s reflexive sneer at business. It is disciplined programme design, independent verification and the willingness to deny or recover payments when milestones are missed.
New Delhi should publish annual scorecards for the scheme. How much support was approved and paid? What proportion of the bill of materials was sourced domestically? How many engineers, technicians and production workers were added? Which components moved from import dependence to competitive local supply? Aggregated claims about lakhs of crores are politically useful but operationally inadequate.
The states matter just as much. Land, power reliability, water, worker housing, ports and municipal permissions determine whether a factory works after the investment summit banners are removed. Opposition-ruled states should compete vigorously for these plants, and the Centre should reward competence rather than party colour. That would expose the silliness of national leaders condemning incentives that their chief ministers actively seek.
The Chinese-brand paradox is not mysterious
Chinese smartphone brands remain powerful in India because they built what consumers actually wanted: wide retail networks, aggressive pricing, fast charging, large batteries and models refreshed at astonishing speed. Nationalist advertising cannot compensate for a weak product. An Indian brand will not earn loyalty by asking buyers to treat a mediocre phone as a patriotic donation.
That is why the scheme’s ambition to nurture Indian brands must be handled carefully. A protected brand can become lazy; a competitive brand can become global. Support should focus on shared capabilities—testing labs, component clusters, design talent, standards certification and patient capital—rather than guaranteeing a favoured company’s market share. The consumer must remain free to reject bad hardware.
I also want policy makers to distinguish ownership from value created in India. A foreign company employing Indian engineers, buying Indian components and exporting from an Indian plant may contribute more than a domestically owned firm importing nearly everything. Both ownership and local capability matter, but slogans tend to flatten the difference.
The old consensus failed workers
Congress nostalgia usually invokes the public-sector temples of an earlier era while forgetting the licence controls, low competition and chronic shortages surrounding them. The post-1991 consensus then swung too far toward the idea that India could import manufactured goods, specialise in services and leave factory ecosystems to East Asia. That bargain produced islands of excellence but too few productive jobs for workers without elite degrees.
The Modi government deserves credit for restoring manufacturing to the centre of economic strategy. Production-linked incentives, semiconductor programmes, logistics investment and digital customs systems are not identical in quality, but they form a recognisable theory: India must become a site of globally competitive production rather than only a large end market.
The counterargument is that subsidies distort markets and divert money from health or education. Of course they can. Yet refusing to subsidise while every competing manufacturing power supports land, credit, infrastructure or research is not purity; it is unilateral disarmament. The task is to make support temporary, conditional and transparent.
I will judge this scheme by what remains when the five years end. If India still imports the same high-value parts, owns little design capability and needs another cheque to retain every plant, the critics will have been right. If suppliers deepen, exports broaden and engineers begin owning more of the product, it will rank among the government’s most consequential reforms.
For now, I prefer an administration willing to attempt that climb over an opposition that alternates between mocking factories and claiming credit when they arrive. India does not need manufactured outrage about manufacturing. It needs patient execution, public scorecards and the confidence to demand more from every rupee of support.
