The Numbers
India’s ambitions to become a global smartphone manufacturing powerhouse have hit a speed bump. One of its largest contributors, Samsung, saw a nearly 20% decline in smartphone exports in the first quarter of FY26, with shipments falling to $950 million.
This isn’t a demand issue — it’s a policy one. Samsung’s exports have dipped sharply following the lapse of benefits under India’s Production-Linked Incentive (PLI) scheme.
The Structural Challenge
Without the cushion of PLI subsidies, India faces a 10–15% cost disadvantage compared to manufacturing giants like Vietnam and China. That delta covers everything from labor cost efficiencies to supply chain maturity and component availability.
Unless addressed, this structural gap may discourage multinational OEMs from making long-term bets on India. And with companies like Apple and Dixon Technologies also nearing the end of their PLI eligibility by FY26, this issue is set to become systemic — not isolated.
Samsung’s Position
Samsung exported approximately $4.4 billion worth of smartphones from India in FY25, a significant figure that shows what’s at stake. The company is also lobbying for retrospective PLI incentives for FY22, citing Covid-era disruptions as a justifiable case for reconsideration. Whether the Indian government provides retroactive relief or not, the bigger issue remains: how sustainable is India’s electronics export model without fiscal scaffolding?
Policy at a Crossroads
The government recently launched a ₹22,919 crore incentive scheme aimed at bolstering components manufacturing — a promising step, but not a replacement for the broader impact PLI has had on final assembly economics.
The decision on extending or reimagining the PLI scheme is now under internal review. Yet time is of the essence. Global supply chains shift fast, and manufacturing decisions made today will shape the competitive landscape for the next decade.
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IMAGE: David Lloyd
