“Made in India” on a phone box can mean several different things, and policy debate becomes silly when we pretend otherwise. Final assembly creates jobs, supplier routines and export capability; it is not fake merely because many high-value parts are imported. It is also not the destination. India’s next task is to deepen the chain into displays, camera modules, printed circuit boards, enclosures, passive components, tooling and eventually more design-intensive work. The government’s Electronics Component Manufacturing Scheme is therefore aimed at the correct bottleneck. Its operational guidelines set out target segments and eligibility, while the official scheme notification explicitly links domestic value addition with integration into global value chains. I give the government credit for moving the conversation below the sticker. Now execution must prove that incentives create capability rather than permanent dependence on incentives.
Assembly was a beginning, not a con
Critics often describe Indian phone manufacturing as screwdriver assembly. The phrase is satisfying and incomplete. Every manufacturing ecosystem begins somewhere, and high-volume assembly teaches quality control, logistics, workforce management and supplier coordination. It also gives policymakers leverage: once large production lines exist, locating suppliers nearby becomes economically plausible. Dismissing those gains because India did not begin with advanced semiconductor fabrication is like mocking a staircase for having a first step.
The government’s production-linked strategy helped make exports and local assembly politically visible. That visibility matters because bureaucracies respond to measurable goals. But volume can flatter domestic value addition. An expensive imported display or chipset may account for far more value than labour and casing added locally. We should celebrate rising production while asking a harder question: how much engineering knowledge, intellectual property and supplier power remain in India when an incentive period ends? National pride is not an accounting method.
Why Chinese brands still understand the market
Chinese smartphone companies did not dominate India only because they underpriced rivals. They built dense distribution, moved quickly between price bands, offered financing, listened to retailer feedback and treated specifications as a local competitive language. They understood that an Indian buyer comparing two phones in a shop might care intensely about charging speed, storage and camera presentation even if a global executive preferred a cleaner portfolio. Their supply-chain scale then allowed rapid product cycles. Political tension and regulatory scrutiny have changed the environment, but consumer memory is practical. A buyer whose previous phone worked well does not abandon a brand because a television panel demands strategic autonomy.
Indian companies cannot win through nationality alone. Appeals to patriotism may secure a trial purchase; reliability earns the second. Brands need software-support commitments, spare parts, service consistency and product planning that survives beyond one festive season. Too many domestic electronics ventures treated branding as the glamorous activity and manufacturing as something a contractor would solve. Sustainable capability requires engineers with authority, patient capital and procurement teams able to develop suppliers. A logo is not an ecosystem.
Incentives must have an exit exam
I support targeted incentives where India faces scale disadvantages and entrenched supply networks elsewhere. Electronics clusters benefit from proximity: a component supplier is more likely to invest when multiple customers operate nearby, while manufacturers prefer locations where suppliers already exist. Government can help break that circular hesitation. The danger is rewarding announced investment, imported machinery or short production runs without measuring learning. Schemes should track local value addition, yield improvement, export competitiveness, skilled employment and supplier development over time.
There must also be an exit discipline. A firm that remains viable only while receiving public support may be preserving employment, but it is not necessarily building globally competitive manufacturing. Incentive rates should taper as capabilities mature. Independent evaluation should publish which target segments advanced and which did not. Commercial confidentiality is legitimate; total opacity is not. Taxpayers need not see every contract to know whether a scheme produced factories operating at scale, domestic vendors and products competitive without tariff walls.
Components require boring competence
Component manufacturing is less photogenic than a phone launch. It depends on power quality, clean water in some processes, logistics reliability, testing labs, environmental compliance, customs predictability and technicians who can solve yield problems at 3 a.m. A state can offer land cheaply and still lose investment if approvals take months or a port connection is unreliable. The Centre’s policy must therefore be matched by state and municipal competence. Electronics strategy is partly industrial policy and partly the uncelebrated business of making industrial estates function.
Skills policy needs similar realism. Companies do not require only elite chip designers. They need line supervisors, equipment-maintenance specialists, quality engineers, toolmakers and operators trained to handle process discipline. Industrial training institutes should work with actual employers on curricula and apprenticeships. Women form a substantial part of electronics assembly workforces, so safe transport, predictable shifts and decent accommodation are industrial infrastructure, not social-policy decorations. A factory that cannot retain trained workers will not climb the value chain.
Do not confuse resilience with autarky
The most dangerous slogan is self-sufficiency interpreted as producing every component domestically regardless of cost. Electronics is globally interdependent. Even manufacturing powers import specialised materials, equipment and intellectual property. India should seek resilience through diversified sourcing, trusted partnerships and domestic strength in selected layers—not a fantasy of sealing the border around a complete phone supply chain. Integration into global value chains, which the scheme itself recognises, is the route to learning and scale.
The counterargument is that dependence on Chinese inputs creates strategic risk. It does. India should map critical dependencies and build alternatives where disruption would be severe. But crude import substitution can make Indian exports uncompetitive and punish consumers through higher prices. The intelligent objective is optionality: more suppliers, more local capability and the capacity to switch when geopolitical shocks arrive. Resilience is measured by recovery, not by the absence of imports.
The next label must describe knowledge
I want “Made in India” to tell me more over time. Was the enclosure tooled here? Was the board assembled here? Did an Indian team design the power system, test the radio or write long-term firmware? Did local suppliers improve enough to win customers outside the protected programme? Those questions move the label from geography toward capability. The government has correctly identified components as the next frontier and deserves credit for learning from the limits of assembly-led growth.
Now it must resist easy victory laps. Chinese brands will remain strong because ecosystems are not dislodged by slogans. Global firms will deepen Indian operations when quality, cost and predictability make commercial sense, not because a minister requests sentiment. Domestic firms will emerge when they combine engineering with distribution and patient after-sales support. Policy can reduce the distance, coordinate investment and absorb some early risk. It cannot manufacture competence by notification. The screws were a start. The real test is whether India learns to design what they hold together.
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