The Cabinet has approved a Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS), setting the stage for the next phase of India’s electronics manufacturing expansion. Jefferies said the policy broadens the government’s focus to deeper component manufacturing, bringing names like Dixon, Kaynes, Syrma, Uno Minda in focus. 

Several other manufacturers like Samsung Electronics India, Foxconn, Tata Electronics, TDK, AT&S, Wipro and Samvardhana Motherson are also likely to be under the spotlight. While the brokerage expects component manufacturers to benefit from the localisation push, it believes Dixon Technologies, the biggest beneficiary of the earlier incentive scheme, is likely to face a more competitive operating environment as more players enter the ecosystem.

Jefferies on EMS sector stock: Impact of the latest Cabinet move

According to Jefferies, the scheme will run from FY27- FY31 and offer sales-linked incentives of 2.25% to 5%, an additional 1.5% incentive for sourcing key components and sub-assemblies locally, and a further 3% incentive for Indian brands undertaking design and research and development.

 The brokerage expects the programme to support Rs 39 lakh crore of mobile phone production over five years, compared with Rs 24 lakh crore to Rs 25 lakh crore achieved under the previous production-linked incentive scheme.

“We view this PLI as a success in localising Mobile assembly and boosting exports. >99% phones sold in India are now locally produced vs <30% in FY15. ~56% of PLI smartphone production was exported, making India #2 largest mobile manufacturing hub globally,” Jefferies said.

Jefferies on Dixon: Earlier beneficiary faces tougher competition

Jefferies said Dixon Technologies emerged as the biggest beneficiary of the earlier Large Scale Electronics Manufacturing scheme but is likely to face a more competitive environment under the new policy as incentives expand across the mobile manufacturing ecosystem.

The brokerage believes broader participation is likely to reduce the relative advantage enjoyed by early beneficiaries as more companies enter handset assembly and component manufacturing.

“Dixon was the key beneficiary of LSEM, but we foresee higher competitive landscape in the Mobile eco-system compared to LSEM in 2021,” Jefferies said.

Jefferies highlights camera module manufacturers

Jefferies said Kaynes Technology, ASUX Safety Components, Syrma SGS Technology, UNO Minda and Dixon Technologies (India) have secured approvals for camera module manufacturing under the Electronics Components Manufacturing Scheme.

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The brokerage noted that these approvals reflect the government’s increasing focus on developing domestic component manufacturing alongside handset assembly, as India looks to deepen local value addition across the electronics supply chain.

Jefferies highlights display module manufacturers

Jefferies said Samsung Electronics India, Dixon Technologies and Wangda Technologies have received approvals for display module manufacturing under the Electronics Components Manufacturing Scheme.

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The brokerage added that expanding domestic display module production is expected to improve value addition within India’s electronics manufacturing ecosystem, where localisation has historically lagged despite rapid growth in smartphone assembly.

Foxconn, Tata Electronics, Wipro, Samvardhana Motherson among approved applicants

Jefferies noted that Foxconn, TDK, AT&S, Tata Electronics, Wipro and Samvardhana Motherson are among the companies that have secured approvals under the Electronics Components Manufacturing Scheme.

The brokerage said the scheme has received around 249 applications, with expected production nearly twice the government’s original target. Jefferies added that 75 applications have already been approved across four rounds, highlighting strong industry interest in expanding India’s electronics manufacturing ecosystem.

Jefferies sees policy shift towards deeper localisation

Jefferies said the earlier production-linked incentive scheme successfully established India as a global mobile phone manufacturing base but achieved lower-than-expected localisation of high-value components.

The brokerage noted that manufacturing products such as camera modules, display modules and precision components requires significantly higher capital investment, longer gestation periods and technology transfer than handset assembly. Jefferies added that the new scheme aims to increase domestic value addition in mobile manufacturing to around 50%, signalling a shift from assembly-led growth towards a deeper manufacturing ecosystem.

Jefferies outlook on India’s electronics strategy

Jefferies believes the new Mobile Phone Manufacturing Scheme represents the next stage of India’s electronics manufacturing strategy by combining production incentives with stronger support for domestic component manufacturing.

The brokerage expects the detailed operational guidelines to determine which companies emerge as the biggest beneficiaries. While Dixon Technologies remains an important participant in the ecosystem, Jefferies expects competition to intensify as more manufacturers enter handset assembly and component production.

Conclusion

Jefferies expects companies such as Kaynes Technology, Syrma SGS Technology, Uno Minda, Samsung Electronics India, Foxconn, Tata Electronics are likely to remain in focus. Aslocalisation gathers pace through the Electronics Components Manufacturing Scheme, Jefferies highlighted that Dixon, the standout beneficiary of the earlier incentive programme, is likely to operate in a more competitive landscape as participation across India’s mobile manufacturing ecosystem widens.

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