Electronics Manufacturing Gains: Vaishnaw Cites Jobs and Tax Gains

New Delhi, October 28: The government has highlighted the economic returns from its mobile phone incentive scheme, as Union Minister Ashwini Vaishnaw responded to concerns about the efficiency of India's electronics manufacturing strategy.

Vaishnaw, who holds the Electronics and IT portfolio, said the Production Linked Incentive scheme for mobile phones has contributed meaningfully to tax collections and job creation. He made the remarks in a post on X.

According to the minister, the government has provided Rs 19,000 crore in incentives under the programme. The sector, he said, has generated Rs 25,000 crore in direct tax revenue and up to Rs 3 lakh crore in GST collections.

He also noted that electronics manufacturing currently provides employment to about 25 lakh people. Of this total, around 12 lakh jobs are associated with mobile phone manufacturing.

The minister's statement is a response to a Bloomberg analysis that examined whether India's push to become a major electronics manufacturer, on the lines of China, would produce the expected economic benefits.

The analysis noted that India has become a significant manufacturing hub for smartphones, with roughly one in four iPhones now assembled domestically. Still, it said the country continues to depend on imported components such as processors, memory chips, batteries and camera lenses, which limits value addition.

The report further suggested that India may be spending large sums on subsidies to attract manufacturers and offset higher production costs, raising questions about the long-term return on these incentives.