The Union Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, aiming to expand India’s mobile phone manufacturing industry over the next five years. The scheme is designed to increase domestic production, strengthen local supply chains, improve value addition, and support the development of Indian mobile phone brands.
The new programme will run from FY 2026-27 to FY 2030-31 and will provide performance-linked incentives for manufacturers based on eligible sales. The government expects the scheme to accelerate exports, create employment, and reinforce India’s position as a global electronics manufacturing hub following the completion of the earlier Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing.
Key Highlights
- Union Cabinet approves Mobile Phone Manufacturing Scheme (MPMS) with a budget of ₹62,500 crore.
- Scheme duration: Five years, from FY 2026-27 to FY 2030-31.
- Production incentives: Eligible manufacturers can receive incentives ranging from 2.25% to 5% on eligible sales.
- Additional incentives: Up to 1.5% for domestic sourcing of key components and 3% for product design and research & development by Indian brands.
- Expected production: Around ₹39 lakh crore in cumulative mobile phone production during the scheme period.
- Employment: The scheme is projected to create approximately 60,000 direct jobs.
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Scheme Offers Incentives for Manufacturing and Local Value Addition
The Mobile Phone Manufacturing Scheme provides financial incentives to companies manufacturing mobile phones in India. The incentive rate on eligible sales will vary between 2.25% and 5%, depending on the category and eligibility conditions.
To encourage greater localisation, the scheme also offers an additional incentive of up to 1.5% for manufacturers that source key components and sub-assemblies from within India. This is intended to reduce dependence on imported parts and strengthen domestic supply chains.
Another notable feature is an additional 3% incentive for Indian brands that invest in product design and research & development (R&D). The government aims to promote technology development, intellectual property creation, and stronger domestic brands alongside manufacturing growth.
Government Targets Higher Production and Exports
According to the government, the scheme is expected to generate around ₹39 lakh crore in cumulative mobile phone production over its five-year tenure. It is also expected to significantly increase India’s mobile phone exports as global demand continues to shift towards diversified manufacturing locations.
The government estimates that the programme will create about 60,000 direct jobs, supporting employment in electronics manufacturing and related industries. Growth in component manufacturing and logistics could also generate additional indirect employment across the supply chain.
The focus on local sourcing and domestic value addition is expected to help India move beyond assembly operations towards higher-value manufacturing activities, improving the country’s competitiveness in global electronics supply chains.
Mobile Manufacturing Has Become a Major Growth Driver
India’s mobile phone manufacturing industry has expanded rapidly over the past decade under the government’s Make in India initiative. According to the official release, electronics manufacturing has increased sevenfold, while electronics exports have grown 11-fold since FY 2014-15.
India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2% of mobile phones used in the country being manufactured domestically. Smartphones also became India’s largest exported product category in 2025, surpassing traditional export items such as diesel fuel and cut diamonds.
The newly approved MPMS follows the completion of the Production Linked Incentive (PLI) Scheme for Large-Scale Electronics Manufacturing, which ended on March 31, 2026. The new scheme aims to build on the manufacturing ecosystem established under the PLI programme, placing a greater emphasis on domestic value addition, component sourcing, and the development of Indian technology and brands.
Source: Ministry of Electronics & IT
