India’s Mobile Manufacturing Push Moves From Assembly Lines to Core Components

• India assembles about 99% of phones sold locally, but domestic value addition is still below 20%.

• ECMS aims to lift mobile component localisation potential to nearly 50% by FY32.

• The scheme’s outlay has increased to about USD 4.21 billion.

• Approved ECMS projects involve around USD 7.32 billion in investment.

• PCBs, displays, cameras, batteries and enclosures are central to the next phase.

India has built a large presence in mobile phone manufacturing, but the country’s next test lies beyond assembly. The focus is now shifting to whether India can produce more of the components that give smartphones their real value.

According to brokerage firm Jefferies, India currently assembles around 99% of the mobile phones sold in the domestic market. However, the level of domestic value addition remains below 20%, showing that much of the high-value hardware inside those phones continues to come from overseas suppliers.

The government’s Electronics Components Manufacturing Scheme, or ECMS, is intended to close that gap. Jefferies expects the programme to potentially raise the share of the mobile phone bill of materials covered by locally manufactured components to about 50% by FY32.

Such a move would represent a major change in India’s electronics manufacturing model. Instead of mainly putting together imported or semi-knocked-down parts, the country would begin producing a larger share of the internal hardware used in mobile devices.

Jefferies reported that the government has raised the ECMS outlay to ₹40,000 crore, equivalent to about USD 4.21 billion. This is 75% higher than the original allocation of ₹22,919 crore, or around USD 2.41 billion.

The scheme is set to run for six years from FY26 to FY32, with an optional one-year gestation period. Jefferies said 106 projects have received approvals under ECMS, with committed capital expenditure of about ₹69,548 crore, equal to roughly USD 7.32 billion.

Government estimates cited by the brokerage indicate that these investments could lead to component production of about ₹5.34 lakh crore, or approximately USD 56.21 billion, over the six-year duration of the scheme.

A Strong Assembly Base, But Limited Domestic Value

India’s rise in mobile manufacturing has so far been driven largely by assembly. Electronics production in the country has more than doubled in five years, increasing from about ₹5.5 lakh crore in FY21 to ₹12.1 lakh crore in FY26, according to Jefferies. These figures translate to roughly USD 57.89 billion and USD 127.37 billion, respectively.

Mobile phones represented about 48% of India’s total electronics production in FY26. Yet, the growth in output has not produced a matching rise in local value capture.

A significant portion of the most valuable smartphone components is still imported. Citing a NITI Aayog report, Jefferies noted that India has successfully localised final assembly, but component manufacturing has lagged in areas such as camera modules, display modules and mechanical enclosures.

The economics of making components are more demanding than those of assembly. Component manufacturing usually requires larger upfront investments, longer project timelines and lower asset turnover. It also depends heavily on technology access, technical partnerships and know-how transfer.

ECMS has been structured to address these weaknesses by encouraging companies to build capacity in key component categories.

ECMS Raises the Localisation Ambition

India’s first mobile manufacturing production-linked incentive scheme, launched in 2021, had targeted around 25% value addition. However, Jefferies reported that the actual outcome did not meet those expectations, leaving the industry strongly tilted toward final assembly.

The new component scheme aims higher. Jefferies estimates that domestic value addition could climb from below 20% of the mobile phone bill of materials today to around 50% by FY32.

This does not necessarily mean that half of every phone assembled in India will immediately be made from Indian components. Instead, it indicates that the manufacturing capacity supported by ECMS could cover nearly half of the mobile phone bill of materials.

The policy aim is therefore broader than increasing phone output. It is about retaining a larger portion of the value embedded in each device within the domestic economy.

Why the Earlier PLI Scheme Fell Short

The initial mobile PLI programme helped establish India as a large-scale assembly base. But it did not fully develop the deeper component supply chain needed to increase domestic value addition.

Jefferies said the earlier scheme fell short of its initial expectation of around 25% local value addition. As a result, India gained scale in final assembly while remaining dependent on imports for many high-value components.

This imbalance matters because components account for most of the value in electronic devices. Without local manufacturing of critical parts, the economic gains from final assembly remain limited.

The reasons are structural. Component plants are more capital intensive, often require longer gestation periods and need specialised technologies. Technology transfer and access to production know-how have also been persistent challenges.

ECMS is designed to tackle some of the supply-chain gaps that the assembly-focused PLI programme did not resolve.

PCBs Remain a Major Opportunity

Printed circuit boards are one of the most important categories under ECMS. Jefferies has identified high-density interconnect and multi-layer PCBs as major areas of opportunity, estimating India’s domestic PCB total addressable market at about USD 7 billion.

Currently, around 85% to 90% of India’s PCB demand is met through imports, according to the brokerage. That makes PCBs one of the clearest examples of India’s dependence on overseas component supply.

Technology tie-ups may help domestic manufacturers narrow the capability gap. Syrma SGS is entering multi-layer and HDI PCB manufacturing through a partnership with South Korea’s Shinhyup. Kaynes Technology has also received ECMS approvals for multi-layer and HDI PCBs, copper-clad laminates and camera modules.

A stronger domestic PCB industry would be important for the wider electronics sector, as circuit boards sit at the centre of almost every modern electronic product.

Developing this capability would allow India to move further upstream in manufacturing rather than remaining concentrated at the final assembly stage.

Cameras and Displays Attract Fresh Investment

Camera modules are another key area where localisation is gaining momentum. Jefferies identified camera modules among the categories receiving ECMS approvals.

Dixon Technologies has partnered with HKC to build display-module manufacturing capacity and has also entered the camera-module business through its stake in QTech India. Syrma is also moving into camera modules while pursuing its PCB expansion plans.

The government has approved display-module projects under ECMS as well. In March, the Ministry of Electronics and Information Technology said Dixon Display Technologies and Wangda Technologies had received approvals for display-module manufacturing.

These categories are important because they represent a meaningful share of smartphone costs. Jefferies estimates that display modules account for around 8% to 9% of a smartphone’s bill of materials, while camera modules contribute about 7% to 8%. Precision components represent another 8% to 9%.

If India can localise more production in these segments, the impact on overall domestic value addition could be substantial.

Approved Projects Signal Growing Momentum

The number and scale of projects approved under ECMS indicate that companies are beginning to commit significant investments to component manufacturing.

Based on government data cited in the Jefferies report, cumulative committed capital expenditure under ECMS had reached about ₹1.15 lakh crore, or roughly USD 12.11 billion. This is almost double the original targeted investment of ₹59,400 crore, equal to around USD 6.25 billion.

The government expects this investment to generate component production of around ₹10.35 lakh crore, or approximately USD 108.95 billion, over six years.

By August 2026, 106 projects had been cleared under ECMS, compared with only seven in the first tranche. The latest tranche alone added 31 projects.

The government’s August announcement also said the 106 approved projects involved ₹69,548 crore, or about USD 7.32 billion, in investment. Around 38 plants had already begun manufacturing, while another 16 were in advanced stages of construction or machinery installation.

This suggests that the component manufacturing push is beginning to move from policy approvals to actual factory capacity.

What India Needs to Build a Component Ecosystem

The localisation effort is not restricted to PCBs, displays and camera modules. Jefferies pointed to investments by Foxconn, Samvardhana Motherson and Tata Electronics in enclosures for mobile phones and IT hardware.

ATL India, part of the TDK Group, is setting up a lithium-ion battery plant with capital expenditure of about ₹2,900 crore, equivalent to roughly USD 305.26 million. Wipro Engineering has received approval for a copper-laminates manufacturing facility involving around ₹1,400 crore, or about USD 147.37 million.

These investments matter because component manufacturing requires a broad ecosystem. PCB production depends on materials such as copper-clad laminates. Camera and display modules require specialised parts, precision processes and technical expertise.

Battery production relies on materials, cell technology and advanced manufacturing methods.

For India to progress from assembly to deeper manufacturing, supply chains must develop across several layers. That includes raw materials, intermediate parts, precision components, complex modules and final products.

The approvals under ECMS show that this transition is underway. However, the key challenge will be converting investment commitments into commercially viable, high-volume production.

Beyond Smartphones

ECMS has been designed to support more than mobile phones. The scheme covers components and sub-assemblies that can be used in IT hardware, telecom equipment, consumer electronics, automotive systems, medical devices and industrial electronics.

This means that capacity built initially for smartphone demand could eventually support a much wider electronics manufacturing base in India.

For companies, the opportunity is changing. Instead of focusing only on assembly contracts, manufacturers are now being encouraged to build capabilities in more complex components, where higher capital requirements, technology access and qualification barriers can create stronger long-term positions.

A successful ECMS rollout could also generate a broader supplier network around materials, precision engineering, testing, machinery and specialised manufacturing services.

India has already shown that it can assemble mobile phones at scale. The next stage will determine whether the country can capture a larger share of the value inside those phones and build a deeper electronics manufacturing ecosystem.