After a decade-long hiatus, during which two out of every three smartphones sold in India were Chinese brands, homegrown phone makers could make a comeback as early as next year, information and technology minister Ashwini Vaishnaw said on Friday.
Speaking at a press roundtable notifying the government's ₹62,500-crore Mobile Phone Manufacturing Scheme (MPMS), Vaishnaw said three homegrown companies are in talks with the ministry of electronics and IT (MeitY) to apply for the scheme’s ‘Target Segment 2’, which focuses on bringing Indian smartphone brands back to the market. He, however, did not name these companies.
“There are three companies at the moment, the names of which I cannot reveal, that we are in talks with. There is one most important point that the government has emphasized upon: that the core design-linked intellectual property of the smartphone in question must be owned by an Indian entity where 51% of the ownership is with Indian citizens,” he said.
“There are four broad price categories of the market, and the brands applying for the scheme are evaluating which would be ideal for them to enter. For now, they have expressed intent in investing in the highest-volume segment,” he added.
He said that considering all factors, a new phone brand under the aegis of Meity’s new mobile manufacturing incentives “will enter the industry next year”.
India’s smartphone industry is its largest contributor to a $100-billion domestic electronics and appliances market, excluding exports. Between 2013 and 2014, an influx of Chinese brands, such as Xiaomi, Oppo, Vivo and OnePlus, saw homegrown brands Micromax, Lava and Karbonn lose their market share and practically exit the sector. Lava, to be sure, continues to operate, both in new devices and as a contractual manufacturer.
For context, Micromax was the oldest of the trio, founded in 2000 and promoted by cofounder, Rahul Sharma. Lava, backed by Hari Om Rai, and Karbonn by Pardeep Jain were both founded in 2009. At their peak, as of September 2013, the three accounted for 40% of India's smartphone market. Micromax led the pack with 22%. India’s annual smartphone sales were then just a fraction of today's volumes, with IDC data pegging annual sales in 2013 at 44 million units. In 2025, the number was 152 million.
In the first half of the calendar, China’s top brands accounted for nearly 68% of all smartphones sold in the country, with South Korea’s Samsung and US-based Apple having a cumulative 25% share, and the remaining held by others.
Industry stakeholders, however, cautioned that the ceiling for entry into the country's current phone market could be “too high”.
Navkendar Singh, associate vice-president at independent market research firm International Data Corporation (IDC) India, said India's smartphone market is facing a double-digit decline, with annual shipments projected at around 130 million.
"This will be the worst year in a decade, and brands currently holding ground in the industry have entrenched themselves in the country by establishing deep-rooted distribution and marketing channels, as well as considerable user trust and recall. Breaking into this hierarchy in such a high-barrier, low-growth market could be very difficult for a new brand,” he warned.
The MPMS, announced on 15 July, will offer the finalized brands 5% as cash incentives on net annual sales of devices, and an additional 3% of net sales for research and development (R&D). Phone manufacturers must be registered in India, have 51% domestic ownership and management control, and hold an Indian patent and trademark for the brand to qualify for the incentives.
The scheme will also continue to offer contractual manufacturers incentives for domestic assembly, but a larger share has been set aside for local component sourcing. Companies will be eligible for the incentives starting this fiscal year if they report an annual turnover of at least ₹5,000 crore.
Incentives range from 2.75% of a base quantum of sales (which is 15% more than net smartphone sales in the previous fiscal year), 5% on additional sales above the base revenue, and an additional 1.5% if the manufacturers source five types of components from within the country for at least 25% of their total volume of phones made.
An empowered committee chaired by MeitY’s secretary will be in charge of the scheme, including assessing which companies qualify for the manufacturing incentives and selecting India’s next phone brand.
