Western smartphone makers, like Apple and Google, are increasingly looking east for growth, giving countries like India significant influence over the sorts of features they build into their phones.
"Normally what happens in emerging markets is they leapfrog others in terms of forging ahead," said Satish Meena, forecast analyst at Forrester. "India has the advantage of volume — they have sufficient volume so they can tell smartphone makers to build certain features."
"The smartphone makers can then try and use them in the African market, and the Middle East market, for example. The African market has similar problems in terms of purchasing power and penetration of smartphones," said Meena.
India has the fastest-growing smartphone market in the world, accounting for 27.5 million devices sold in the second quarter of 2016, up 17 percent from the previous quarter, according to IDC. Mobile subscriptions are expected to hit 1.4 billion by 2021, according to the Ericsson Mobility Report, released in June.
"Everybody is looking at India as a huge landing ground for their innovation and also as a next big step in that part of the world," said Sanjeet Pandit, Qualcomm senior director for business development and sales for Asia-Pacific and India. Qualcomm's chips are used in about 30 percent of smartphones in India.
The country's 1.3 billion citizens are spread across across a vast geographic area — from modern urban hubs to poor rural villages — which has made delivering payments and services challenging for both the public and private sector, said Forrester's Meena.
The government is promoting a program known as the Aadhaar initiative which assigns a unique identification number to every registered citizen — similar to a U.S. Social Security number — and is encouraging people to submit fingerprints and iris scans.
That biometric information allows people to more easily access government services, such as subsidies, health care and education, or do things like open a bank account or cellphone plan remotely using an Aadhaar-approved cellphone. The government is pushing smartphone makers to create devices for the domestic market which support iris-based authentication technology.
More than a billion people have already signed up for an Aadhaar number, and the program is already helping to combat benefits fraud and greasing the wheels of business.
"The Aadhaar program has been one of the most innovative things that the government of India has launched," said Pandit. "It's not easy to scale such a huge program and collect so many scans across a diverse population and all across the market. They have done a fantastic job in getting that going."
India is leapfrogging ahead of many developed countries to a paperless, cashless, presence-less system, said Piyush Peshwani, who helped create the Aadhaar authentication enrollment technology and process which was launched with fingerprint-based scans in 2010. Iris-based authentication technology is something that recently caught the imagination of the smartphone makers, he said.
"Iris is going to help with accuracy," said Peshwani. "People who do a lot of manual work with their hands — their fingerprint actually wears off, but the iris is something that still remains."
"It's a huge market and supporting this technology is only going to help them make inroads into the market," he said.
Korean manufacturer Samsung — which has 25 percent of the smartphone market in India according to IDC — is the only company with an Aadhaar-approved device currently on the market. The Galaxy Tab Iris costs around $200 and features the sort of iris-recognition technology the government would like to see embedded in all devices aimed at the Indian market. Unlike the Galaxy Note 7, which is equipped with an even more secure form of iris-based authentication technology, it has not allegedly been catching on fire.
Qualcomm is working closely with government authorities to get more Aadhaar-enabled devices onto the market, and working with customers — including the biggest Android manufactures — to integrate required features, such as secure cameras and iris authentication partners.
"Device manufacturers are making sure that the requirements of the Indian government get integrated into the handsets," said Pandit.
In July, the Unique Identification Authority of India (UIDAI), which administers Aadhaar, called a meeting with executives from Apple, Alphabet's Google, Microsoft, Samsung, and Indian smartphone maker Micromax, among others, to talk about developing Aadhaar-compliant devices. Apple reportedly did not attend the meeting, though CEO Tim Cook has singled out India as a top priority. Apple, Google, Microsoft and Micromax did not return our request for comment. Samsung declined to comment.
That said, U.S. smartphone makers have been reticent about aligning themselves too closely with governments for business, privacy and security reasons. Microsoft is reportedly working with the government to integrate Skype with the Aadhaar database, so video calling could be used for authenticated calls, according to Bloomberg. It is unclear, though, how U.S. tech companies will respond to the Indian governments' demands.
"There is a lot of facilitation by the government, but it all depends on every particular company's interests as to what portion of that they want to leverage," said Pandit.
A second Aadhaar-compliant device will be available by November: The OctoPOS is a sub-$100 Android device that incorporates iris recognition technology developed by the University of Beijing's Department of Pattern Recognition, according to a report from the Economic Times. Indian fintech startup Simpal is behind the device, which is being manufactured in China.
A number of other handset manufacturers are going through the certification process, but have not yet been approved. The Indian market is drawing a lot of interest from Asian manufacturers, said Pandit.
"We have see a lot of interest from the Chinese, the Taiwanese and also the Indian private brands," said Pandit.
Of course, the collection of the personal biometric information of Indian citizens in a giant database presents an enticing target for cybercriminals. And while many consumers are happy to surrender biometric information, such as a thumb print or iris scan, to obtain government and businesses services, some consumers and civil liberties unions worry that their information may be misused.
Ajay Bhushan Pandey, chief executive officer of UIDAI, has sought to ally security and privacy concerns, and pointed to strong the encryption techniques employed by the government and its track record of protecting information.
Correction: This story was revised to correct that the 27.5 million smartphone sales in India represented a 17 percent gain from the previous quarter, not from the previous year.