Indian electronics policy has reached the awkward stage between success and self-congratulation. The country now assembles phones at a scale that would have sounded implausible a decade ago. Global brands source more production here, exports have risen, factories have expanded and state governments compete for investment. Anyone denying that change because it occurred under a government they dislike is being unserious.
The official architecture is visible in MeitY’s large-scale electronics PLI page, which describes incentives linked to incremental sales and explicitly identifies infrastructure, supply chains, finance, design and skills as existing disadvantages. Government reporting has also recorded substantial PLI disbursements and investment. Those are real policy signals. My argument is that the next debate must move from how many finished phones leave Indian factories to how much technology, risk and value remain in India.
Assembly is not fake manufacturing
Critics sometimes dismiss assembly as screwdriver work. That is glib. Large-volume electronics assembly demands process discipline, logistics, quality control, workforce training and coordination with suppliers. It creates jobs, develops managerial capability and can anchor adjacent investment. Countries do not teleport from importing finished devices to fabricating advanced chips. They climb through stages.
The government deserves credit for making the first stage commercially credible. Policy continuity, tariffs and incentives changed corporate calculations. Apple’s expanding Indian production is important not because one foreign logo validates the nation, but because demanding global supply chains force improvements in yield, traceability and delivery. Domestic contract manufacturers also gain opportunities to learn and scale.
But a stage becomes a trap when officials present it as arrival. The largest shares of a smartphone’s value can reside in the processor, display, memory, camera components, intellectual property, software and brand. If many of those are imported while final assembly earns a thinner margin, export value looks more impressive than domestic value addition. Both numbers should be published clearly.
I want annual reporting that distinguishes gross production, exports, imported inputs, local value addition, employment quality, incentive paid and tax revenue generated. “Mobile phone exports” is useful but incomplete. Policymakers should know whether each rupee of support is helping firms deepen capability or merely route products through an eligible factory.
Chinese brands dominate for rational reasons
Indian consumers continue to buy phones from Chinese-origin brands because those companies understand the market’s price-performance expectations. They built distribution, service networks, financing relationships and rapid product cycles. They offer bright displays, large batteries, fast charging and aggressive cameras at prices where global premium brands make obvious compromises. National pride does not answer a buyer comparing monthly instalments.
Some political rhetoric assumes that local manufacturing will automatically produce Indian consumer brands capable of displacing them. Manufacturing and brand-building are related but different skills. A company needs product planning, software support, channel trust, after-sales service and sustained research. Sticking an Indian label on an imported reference design does not create a competitive national champion.
The government should resist choosing a favourite handset brand. It should create common capabilities: testing laboratories, component ecosystems, reliable power, efficient customs, skilled technicians and research partnerships. Let firms compete on products. Industrial policy works better when it solves shared constraints than when it tries to manufacture celebrity entrepreneurs.
Chinese suppliers may also remain part of the ecosystem even as India diversifies. Components, machinery and expertise cross borders. Security concerns around networks, data and strategic dependencies are legitimate, but indiscriminate hostility can slow localisation by preventing joint ventures or technical hiring needed for the transition. Policy must distinguish risk from origin-based theatre.
The component drawer is where policy gets difficult
Components require different economics from final assembly. A display or semiconductor facility needs enormous capital, high utilisation, clean infrastructure and customers beyond one local product cycle. Tooling suppliers and precision manufacturers need predictable orders. Materials and chemicals require environmental regulation capable of being strict and fast, two qualities Indian administration rarely combines.
This is why incentive design must become more selective. We should support areas where India can build scale or strategic resilience, not announce domestic production of every component regardless of economics. Power electronics, battery-management systems, packaging, camera modules, enclosures, printed circuit assemblies and semiconductor design may offer different routes. Each requires its own measurement.
Semiconductor fabrication attracts the largest headlines, but packaging, testing and design are not consolation prizes. India already has deep chip-design talent. The policy challenge is to connect design work to domestic product companies, manufacturing services and intellectual property ownership. Engineers executing slices of foreign projects are valuable; firms controlling products capture more upside.
Research incentives should reward patents only when they correspond to useful capability. Patent counts can become another ceremonial metric. Universities need fabrication access, industry-linked laboratories and procurement systems that do not take a year to buy equipment. Faculty and engineers should be able to create companies without navigating rules written for suspicion rather than innovation.
Jobs must be measured by quality as well as quantity
Electronics assembly can employ large numbers of workers, including women entering formal factory work. That is socially significant. Yet policy celebrations should not obscure wages, transport, accommodation, safety, career progression and worker voice. A job becomes a development path when skills and earnings grow, not merely when a badge records attendance.
Factories often depend on contract labour to manage volatile orders. Some flexibility is unavoidable in consumer electronics, where launches create peaks. The state should still enforce basic protections and collect data on retention, injuries, training and advancement. Subsidies should not reward a race to the cheapest disposable workforce.
Location matters. Plants clustered near existing industrial corridors benefit from ports, airports and suppliers, but workers need affordable housing and public transport. State governments offering land should plan the surrounding city, not discover after recruitment that thousands of employees face unsafe commutes and inflated rents. Industrial policy extends beyond the factory gate.
Skills programmes must follow real production needs. Companies should help design curricula, but public institutions should not become captive training departments for one employer. Workers need transferable competence in quality systems, maintenance, automation and electronics repair. The goal is an ecosystem in which experience carries value across firms.
From incentives to self-sustaining capability
PLI was designed as a time-bound bridge, and it must remain one. Firms should not organise their Indian economics around endless subsidy renewal. Performance thresholds need independent audit, and the government should publish why an incentive was paid or denied. Successful companies should eventually prefer India because the cluster works, not because the cheque continues.
Tariffs also require discipline. Temporary protection can encourage local production; permanent high barriers can make Indian consumers pay more for inefficient supply. Components unavailable domestically should not be taxed merely to create a localisation statistic. The sequencing between import duties and actual local capacity must be credible.
Procurement can support Indian products, particularly in strategic and government systems, but standards should not be weakened to guarantee winners. A protected supplier with no export discipline may become expensive and complacent. The best evidence of competitiveness is a customer abroad choosing the product without being instructed by New Delhi.
I credit the Modi government for turning electronics manufacturing from seminar material into factory reality. That is a meaningful achievement, and the reflexive opposition habit of calling every production announcement propaganda cannot erase it. Yet government supporters should be equally wary of mistaking gross output for technological sovereignty.
India has won a place on the assembly line. The next decade must build suppliers, tools, materials, design ownership and workers who move up the value chain. That work is slower than inaugurating a plant and harder to photograph. It is also where Make in India will be judged. The finished phone may carry a local manufacturing label; the component drawer tells us how much of the future we actually own.
