India's smartphone manufacturing journey has evolved beyond simple assembly to scale first production, achieving significant results in a decade to become the world's second-largest smartphone maker by volume. As reported by NDTV Profit, the government implemented various schemes from 2011 onwards, with the Production Linked Incentive scheme offering 4% to 6% incentive on additional production over five years. Under the new Mobile Phone Manufacturing Scheme (MPMS), large firms receive support between 2.25% and 5% on sales, with an additional 1.5% for buying from Indian suppliers, while Indian-owned brands get a 5% base incentive with an extra 3% for design and R&D done in India. However, recent analysis suggests that MPMS may not be sufficient to attract more R&D and workforce training, highlighting the need for deeper supply chain integration.
Vietnam has significantly advanced its manufacturing capabilities, with Google building the Pixel 11 phone from scratch in Vietnam - a milestone that demonstrates Vietnam's growing sophistication in specialized manufacturing. According to NDTV Profit, Apple has also chosen Vietnam for making complex products like AirPods and iPads, while the Vietnamese government's VND408 trillion loan programme targets small and medium-sized enterprises across priority sectors including agriculture, high-tech activities, exports, digital economy, artificial intelligence, semiconductors, and green projects. The initiative targets businesses in these sectors, with loans denominated in Vietnamese dong carrying interest rates at least one percentage point below each participating bank's average lending rate for comparable maturity periods.
The competitive dynamics between India and Vietnam are becoming increasingly clear as both countries position themselves as alternatives to China while taking different strategic paths. As reported by NDTV Profit, India may become a global hub for smartphones and could develop capabilities in camera modules, batteries and semiconductor packaging, while Vietnam is likely to maintain its edge in specialized components and advanced technologies. The analysis suggests that India needs to close the gap with Vietnam quickly to avoid being overtaken by another manufacturing destination, with the Vietnamese government's recent VND408 trillion loan programme demonstrating its commitment to supporting manufacturing competitiveness across multiple sectors. India's consumers are changing their preferences, with Indian-owned brands increasing from 58% to 77% of celebrity endorsement portfolios, while the manufacturing sector is moving deeper into supply chain integration through local components, design and R&D initiatives.
The competitive landscape is evident in recent product decisions by major technology companies. As reported by NDTV Profit, Apple has expanded iPhone production in India but continues to source AirPods, Apple Watches, iPads and components from Vietnam, while Google chose both India and Vietnam for Pixel phone manufacturing. The Vietnamese government's recent VND408 trillion loan programme demonstrates its commitment to supporting manufacturing competitiveness across multiple sectors, with the State Bank of Vietnam announcing that 12 commercial banks have registered participation in this credit programme, with four state-owned banks committing VND220 trillion alone. This positions Vietnam as a serious competitor to India in the global smartphone manufacturing landscape.
