Samsung’s exports have experienced a significant downturn. The company’s exports decreased by approximately 20 percent in the first quarter of fiscal year 2025-26. This decline is attributed to Samsung’s exclusion from the Production Linked Incentive (PLI) scheme. This downturn could pose a major setback to India’s ambitions to become a global smartphone manufacturing hub.
In the June quarter of FY25, Samsung exported smartphones worth approximately $1.17 billion. This figure dropped to $950 million in the first quarter (July-September 2025) of FY26. Moreover, this figure is also less than the $1.2 billion recorded in the previous quarter (January-March 2025).
Samsung is no longer eligible for incentives through the PLI scheme. The scheme’s five-year validity (FY21-FY25) has expired. As the company did not meet the target in FY22 due to COVID-19, it did not receive an incentive for that year. Samsung is now seeking another opportunity in FY26 to compensate for the loss in FY22.
Reports indicate that manufacturing costs in India are 10 percent higher than in Vietnam and 15 percent higher than in China. The 4-6 percent incentive provided by the PLI scheme partially mitigates this difference. Without the incentive, manufacturing in India could become more expensive, potentially driving companies towards Vietnam or China.
Apple and Dixon Technologies will also be leaving the PLI scheme after FY26. Dixon manufactures phones for Motorola, Google, and Xiaomi in India. If these companies also reduce their exports due to the lack of incentives, India’s dream of becoming a smartphone export hub might remain unfulfilled.
The government has acknowledged that the absence of incentives reduces India’s competitiveness. However, a decision on extending the PLI scheme has not yet been made. The government recently launched a new component PLI scheme of ₹22,919 crore to enhance local value addition.