PLI Scheme Opens New Doors for MSMEs

India’s smartphone sector has just set a record, exports crossed ₹1 trillion in the first five months of FY26, a 55% jump over the same period last year despite the ongoing tariff dispute with The US. The surge has been driven largely by Apple’s contract manufacturers, Tata Electronics and Foxconn, which together account for nearly three-fourths of shipments. For MSMEs, this is more than a headline about numbers; it signals a once-in-a-decade opportunity to plug into global supply chains.

At the heart of this growth is the government’s Production-Linked Incentive (PLI) scheme for electronics manufacturing, a broader industrial policy that rewards manufacturers in selected sectors for increasing production and creating local value. PLI does not apply only to phone assemblers: it covers specified electronics products (including mobile phones and certain components) as well as other sectors such as pharmaceuticals, textiles and auto components. Incentives are paid on incremental domestic sales over a defined base year and are designed to attract investment, boost local suppliers and raise the share of value added in India over multiple years. For more info: https://www.india.gov.in/production-linked-incentive-pli-scheme?utm 

Each year, companies that expand production and exports receive direct financial incentives, which has prompted multinationals like Apple to scale up Indian operations. Importantly, the PLI has also created a ripple effect driving fresh investments worth more than ₹50,000 crore into component manufacturing, sub-assemblies, and the wider ecosystem. This shift means India is no longer just assembling phones but slowly building a deeper supply base.

MSMEs’ Big Opportunity in the Supply Chain

For MSMEs, the real opening lies in components and allied manufacturing. Every smartphone requires hundreds of inputs from chargers and casings to printed circuit boards, semiconductors, packaging, and logistics support. While big players handle assembly, the demand for smaller parts, precision tools, testing services, and even accessories is rising sharply. In fact, industry estimates suggest value addition in smartphones rose from 5–6% in 2021 to nearly 19% by FY25, and is expected to grow further as more suppliers localise. This is the entry point for MSMEs who can specialise in niches where speed, flexibility, and cost efficiency matter most.

Steps Entrepreneurs Can Take 

But how can entrepreneurs actually benefit? First, firms already making plastic moulds, metal casings, or electronics accessories should seek vendor approvals with PLI-approved manufacturers. Many Tier-1 suppliers are actively scouting Indian partners to reduce import dependence. Second, those in packaging, warehousing, or logistics should align with export hubs where smartphone clusters are emerging, such as Tamil Nadu, Karnataka, and Uttar Pradesh. Third, new entrants can explore component manufacturing through technology partnerships or joint ventures. Even a small foothold in cables, connectors, or printed boards could mean long-term contracts as global firms diversify from China. Government portals like the Electronics EPC and DGFT provide updated registration and scheme details, making it easier for MSMEs to connect with buyers.

The caution, however, is clear: India’s success so far is heavily tilted toward Apple and its suppliers, while China still dominates raw materials and chips. Without scaling up local ecosystems, MSMEs may face supply bottlenecks. Yet, as the government signals sustained policy backing, the window for entrepreneurs is wide open.

The smartphone export boom is not just about big brands crossing new milestones. It is about whether smaller Indian firms can seize the moment to move up the value chain. For MSMEs willing to invest in compliance, scale, and partnerships, this could mark the beginning of India’s rise as not just an assembly base but a true electronics manufacturing powerhouse.