Samsung is facing a significant drop in smartphone exports, with a 20% decrease in the first quarter of 2025-26. The primary reason is the company’s inability to benefit from the Production Linked Incentive (PLI) scheme. This downturn could hurt India’s aspirations to become a global smartphone manufacturing hub.
In the June quarter of FY25, Samsung exported around $1.17 billion worth of smartphones. This figure fell to $950 million in the first quarter of FY26 (July-September 2025), which is also lower than the $1.2 billion recorded in the previous quarter (January-March 2025).
Samsung is now ineligible to receive incentives under the PLI scheme as its five-year term (FY21-FY25) has concluded. Samsung couldn’t achieve its targets in FY22 due to the COVID-19 pandemic, and thus, didn’t receive the incentive for that year. The company is seeking an additional chance in FY26 to make up for the loss.
Reports suggest that manufacturing costs in India are higher compared to Vietnam (10%) and China (15%). The PLI scheme provided a 4-6% incentive, which helped reduce this cost difference. Without these incentives, manufacturing in India could become more expensive, prompting companies to consider Vietnam or China.
Apple and Dixon Technologies will also exit the PLI scheme after FY26. Dixon manufactures phones for Motorola, Google, and Xiaomi in India. If these companies also reduce exports due to the absence of incentives, India’s dream of becoming a smartphone export hub might remain unfulfilled.
The government has recognized the impact of no incentives on India’s competitiveness, but there is no firm decision yet on extending the PLI scheme. The government recently launched a new component PLI scheme worth ₹22,919 crore to boost local value addition.