India's Production-Linked Incentive scheme for electronics manufacturing has crossed from policy announcement to demonstrated industrial outcome. The PLI scheme, launched in phases from 2020 onward, offers cash incentives to manufacturers based on incremental production above a baseline threshold -- effectively subsidising the operating economics of manufacturing in India relative to alternatives. The smartphone and electronics component PLI schemes have attracted commitments from Apple's contract manufacturers, Samsung, and a cohort of domestic electronics companies that had not previously operated at globally competitive scale. The production data from 2025 confirms that the incentives are driving real output, not just announced investments: India's electronics exports crossed forty billion dollars in the year ended March 2025, up from under twenty billion dollars five years earlier.
The geopolitical context is amplifying the commercial logic of the PLI incentives. The US-China trade relationship has gone through successive rounds of tariff escalation, export controls, and supply chain scrutiny since 2018. Technology companies and their investors have elevated supply chain diversification from a nice-to-have risk management practice to a strategic necessity. The question is no longer whether to add non-China manufacturing capacity but where -- and India, with its PLI incentives, its large English-speaking engineering workforce, and its relatively open investment environment, is the most credible alternative to China for electronics assembly and component manufacturing at scale.
Apple's India Ramp Is the Reference Proof Point
The most significant commercial validation of India's electronics manufacturing ambition is Apple's progressive localisation of iPhone production through its contract manufacturers -- Foxconn, Wistron (now Tata Electronics), and Pegatron. India-assembled iPhones were first exported in meaningful volumes in 2023, and the ramp has continued through 2025 and 2026 to the point where India accounts for a meaningful double-digit percentage of global iPhone production. The scale of this ramp -- involving millions of units per year from facilities that did not exist five years ago -- represents the most significant single shift in global consumer electronics manufacturing geography since Chinese dominance was established in the 2000s.
The Apple supply chain ramp matters not just for the direct employment and export revenue it generates but because Apple's exacting quality and logistics requirements force its Indian manufacturing partners to build operational capabilities -- workforce training systems, quality management processes, logistics infrastructure -- that create a platform for broader electronics manufacturing. The factory management practices, the logistics connectors, and the skilled workforce that Apple's supply chain requires do not disappear when the production line shifts -- they become the foundation for the next wave of electronics manufacturing that follows the same infrastructure.
The supply chain localisation beyond final assembly is the more important long-term story. Apple's initial India production used components sourced primarily from China, assembled in India. The next phase -- component manufacturing in India, including printed circuit boards, display modules, and camera assemblies -- is now beginning, driven by additional PLI sub-schemes targeting specific component categories and by the commercial logic of reducing cross-border component logistics in a geopolitically uncertain environment. The component localisation will take a decade to achieve at the depth that Chinese supply chains have built over thirty years, but the direction and the pace are both accelerating.
The Semiconductor PLI and the Next Frontier
India's semiconductor PLI scheme, announced in 2021 and expanded in 2023, represents the most ambitious component of the broader electronics manufacturing push. The scheme offers incentives for semiconductor fabrication, advanced packaging (OSAT), and display manufacturing -- the highest-value-added stages of the electronics supply chain. The initial response was slower than the government had hoped, because semiconductor manufacturing is more capital-intensive and technically demanding than electronics assembly, and the supply of qualified engineers and technicians for fab operations in India was thin relative to the requirement.
The more recent announcements have been more concrete. Micron Technology's semiconductor assembly and test facility in Gujarat -- the first US semiconductor company to commit to Indian manufacturing -- received final government approvals and began construction in 2024. Tata Electronics announced a joint venture with Powerchip Semiconductor Manufacturing Corporation for a semiconductor fab in Dholera, Gujarat, which if executed will be India's first commercial semiconductor fabrication plant. These are significant commitments but they are at the early stage -- groundbreaking and construction, not production -- and the timeline to meaningful semiconductor output is several years, not months.
The OSAT (outsourced semiconductor assembly and testing) opportunity is more immediately accessible than fabrication. OSAT operations require less specialised infrastructure than fabs and can be established faster with lower capital investment. The semiconductor PLI scheme's provisions for OSAT incentives are attracting interest from both domestic companies (Tata, Vedanta) and international OSAT players evaluating India as a complement to their existing operations in Malaysia, Thailand, and the Philippines. The global OSAT industry's interest in supply chain diversification away from single-country concentration maps directly onto India's incentive offering.
State-Level Competition and Manufacturing Zone Investment
Within India, the PLI scheme has catalysed intense competition among state governments to attract electronics manufacturing investment. Tamil Nadu, Karnataka, Telangana, Maharashtra, and Gujarat are each offering complementary state-level incentives -- land at concessional rates in dedicated electronics manufacturing zones, single-window approval processes designed to reduce the regulatory friction that has historically deterred manufacturing investment in India, and workforce development programmes that pre-train workers in electronics assembly skills before facilities open.
Tamil Nadu's success in attracting Apple supply chain manufacturers -- Foxconn and Pegatron both have major facilities in Chennai -- has created a regional electronics cluster that generates its own momentum. Component suppliers, tooling providers, and logistics operators follow final assembly into the same geography, reducing logistics costs and enabling the supplier density that drives down component lead times. The cluster effect in Tamil Nadu's electronics corridor is now visible and is attracting the next generation of investment decisions by companies evaluating India entry: the existing supplier base, the workforce experience, and the port logistics of Chennai provide a lower-risk entry point than a greenfield location with no ecosystem around it.
Gujarat's positioning in semiconductors -- Micron in Sanand, the proposed Tata-PSMC fab in Dholera -- reflects a different strategy: attract anchor investments in high-value manufacturing that are less footprint-sensitive and more dependent on policy support and skilled technical talent. The Dholera Special Investment Region, a purpose-built industrial township, is designed to offer the power reliability, water supply, and logistics connectivity that semiconductor manufacturing requires at a standard that existing Indian industrial zones have not consistently delivered.
Infrastructure Gaps That Still Constrain the Ambition
The PLI scheme's commercial success in electronics assembly has been real, but the infrastructure gaps that limit India's manufacturing competitiveness relative to China remain significant and must be acknowledged. Power reliability -- consistent electricity supply at industrial scale -- is improving but is not yet at the standard that precision electronics manufacturing requires in all manufacturing states. Logistics infrastructure -- ports, road connectivity from manufacturing zones to ports, customs clearance speed -- is improving through investment but is behind Chinese and Southeast Asian competitors on specific metrics including dwell time at ports and customs predictability.
The skilled workforce question is nuanced. India produces a large number of engineering graduates, but the specific skills required for high-precision electronics manufacturing -- process engineering, quality systems, supply chain management -- require on-the-job development in manufacturing environments that did not previously exist at scale in India. The Apple ramp has been creating that experience base, but it takes years to build the depth of manufacturing experience that China's electronics industry has accumulated over three decades. The workforce gap is narrowing but is not yet closed.
Top 10 Companies in This Space
- Tata Electronics -- Tata Group's electronics manufacturing arm, acquired Wistron India operations, Apple supply chain and semiconductor fab JV
- Foxconn Technology Group -- world's largest electronics contract manufacturer, largest iPhone assembler and India manufacturing investor
- Dixon Technologies -- India's largest electronics manufacturing services company, domestic market and export contract manufacturing
- Micron Technology -- US semiconductor company, memory chip assembly and test facility under construction in Gujarat
- Samsung India Electronics -- largest mobile phone manufacturer in India by production, Noida facility serves domestic and export markets
- Vedanta Semiconductors -- Vedanta Group semiconductor and display manufacturing ambition, Foxconn JV now restructured as independent entity
- Pegatron India -- Taiwanese EMS company, Apple iPhone assembly in Chennai, third Apple contract manufacturer to enter India
- Salcomp -- Finnish charger manufacturer, large India facility supplying Apple and Android ecosystem, significant PLI beneficiary
- Kaynes Technology -- Indian electronics manufacturing services company, PCB assembly and IoT device manufacturing for domestic and export
- Rising Star Mobile -- India-based Apple display module and component manufacturer, supply chain localisation beyond final assembly
Our Take
India's PLI-driven electronics manufacturing ramp is real, commercially validated, and structurally supported by geopolitical supply chain diversification pressure that will not abate. The Apple supply chain localisation is the clearest proof point, but it is the leading indicator of a broader trend that will see India capture a meaningful share of the electronics manufacturing that is moving out of China-only concentration over the next decade. The investment opportunity is in the domestic Indian electronics manufacturing services companies -- Dixon, Kaynes, Tata Electronics -- who are building the operational platforms that will serve multiple brand clients beyond Apple, and in the component manufacturers who are building India's supply chain depth beyond final assembly. The semiconductor frontier is further out and carries more execution risk, but Micron's commitment and the Tata-PSMC fab announcement indicate that the trajectory is toward genuine semiconductor capability rather than just assembly. -- Daniel Osei, MarketsNXT