India’s arrival on the global manufacturing scene has been a long-awaited sequel to its success in IT exports. One recent bright spot is electronics — specifically, smartphones. Launched in early 2020, the government’s smartphone Production-Linked Incentive (PLI) scheme has delivered impressive results.

An investment of about $1.2 billion under the scheme has driven $64 billion in production by FY 2025 — more than double the $30 billion in 2020. Total investment in the broader smartphone ecosystem — including non-PLI participants — is conservatively estimated at around $8 billion, creating about 1.5 lakh jobs — with some estimates putting the figure as high as 2 lakh. As a result, exports have soared from $3.1 billion to $24 billion, lifting India’s share of global smartphone exports from 1 per cent to 8 per cent.

Building on the success of the PLI, the government has launched the Electronics Component Manufacturing Scheme to nurture a domestic component ecosystem. Against an expected investment of Rs 59,350 crore, applications worth twice that amount have poured in, with 1.4 lakh jobs committed versus 91,600 originally envisaged. This success has not been repeated across other sectors where PLIs have been applied. Overall, Rs 1.97 lakh crore was earmarked for PLIs, yet barely 10 per cent has been disbursed. What explains the smartphone PLI’s success, and can it be replicated in other sectors?

The first reason for its success was that it had a clear export focus from the start. It targeted two segments: Phones with an invoice value of Rs........

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