In a major push to strengthen India's electronics manufacturing ecosystem, the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore. The ambitious five-year scheme aims to accelerate domestic mobile phone production, deepen local value addition, strengthen supply chains, promote Indian brands and enhance the country's competitiveness in the global electronics market.
The scheme, which will be implemented from FY 2026-27 to FY 2030-31, succeeds the Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), whose tenure ended on March 31, 2026. The government expects the new initiative to further consolidate India's position as a global mobile phone manufacturing hub while encouraging innovation, research and development, and indigenous technology creation.
Under the MPMS, manufacturers will receive incentive support on eligible sales of mobile phones produced in India at differentiated rates ranging from 2.25 per cent to 5 per cent. The scheme also offers an additional incentive of up to 1.5 per cent for companies that increase domestic sourcing of key components and sub-assemblies, encouraging greater localisation across the supply chain.
To promote home-grown smartphone companies, the government has introduced a separate 3 per cent incentive on eligible sales for Indian brands undertaking product design and research and development. The move is aimed at helping Indian firms move beyond contract manufacturing to develop proprietary technologies, intellectual property and globally competitive products.
According to the government, the scheme seeks to build Indian brands capable of achieving technological sovereignty while capturing greater economic value through innovation, design capabilities and patent creation.
The Centre expects the Mobile Phone Manufacturing Scheme to significantly expand India's electronics production over the next five years. During the scheme period, cumulative mobile phone production is projected to reach approximately Rs 39 lakh crore, accompanied by a substantial increase in exports.
The initiative is also expected to generate around 60,000 direct jobs, providing employment opportunities across manufacturing facilities, component production and associated supply chains. Officials said the programme would contribute to economic growth while strengthening India's position in global electronics manufacturing and exports.
The government said the new scheme builds upon the rapid expansion of India's electronics sector under the Prime Minister's Make in India initiative. Since FY 2014-15, electronics manufacturing in the country has grown seven-fold, while electronics exports have increased 11 times, making the sector one of the fastest-growing manufacturing segments.
The electronics industry has also emerged as a major source of employment, particularly for young men and women from rural and semi-urban areas. Several manufacturing plants now employ more than 5,000 workers at a single location.
Mobile phone manufacturing has been the cornerstone of this growth. India has become the world's second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used in the country now being manufactured domestically.
The government highlighted that smartphones became India's largest exported product category in 2025, overtaking traditional export leaders such as diesel fuel and cut diamonds. Mobile phones now account for a significant share of India's electronics production and exports, reinforcing the country's integration into global value chains.
Officials said the new Mobile Phone Manufacturing Scheme is designed to sustain this momentum after the conclusion of the PLI-LSEM programme and to shift the focus towards higher domestic value addition, resilient supply chains, globally competitive manufacturing and the emergence of Indian technology brands with strong design and R&D capabilities.
Leave Your Comment