Samsung is facing a significant drop in smartphone exports, with a decline of about 20% in the first quarter of FY2025-26. This decline is mainly attributed to Samsung’s inability to avail the benefits of the Production Linked Incentive (PLI) scheme. This situation could prove to be a major setback for India’s goal of becoming a global smartphone manufacturing hub.
In the June quarter of FY25, Samsung exported smartphones worth about $1.17 billion. In the first quarter of FY26 (July-September 2025), this figure decreased to $950 million. This amount is also lower than the $1.2 billion recorded in the previous quarter (January-March 2025).
Samsung is now unable to receive incentives through the PLI scheme because its five-year validity (FY21-FY25) has concluded. The company did not meet its targets in FY22 due to the COVID-19 pandemic, and thus, it did not receive an incentive for that year. Samsung is now requesting another chance in FY26 to compensate for the loss in FY22.
Reports show that manufacturing costs in India are higher compared to Vietnam (10%) and China (15%). The PLI scheme provided an incentive of 4-6%, which helped to narrow this cost difference. Without this incentive, manufacturing in India could become more costly, potentially causing companies to move towards Vietnam or China.
Apple and Dixon Technologies will also be exiting the PLI scheme after FY26. Dixon makes phones for Motorola, Google, and Xiaomi in India. If these businesses also reduce exports due to the lack of incentives, India’s dream of becoming a smartphone export hub may not be realized.
The government has acknowledged that without incentives, India’s competitiveness decreases, but no firm decision has been made on extending the PLI scheme. The government recently launched a new component PLI scheme of ₹22,919 crore to boost local value addition.