The Union Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with a ₹62,500 crore outlay to accelerate domestic smartphone production, increase exports, deepen local value addition, and promote Indian mobile phone brands. The scheme will run for five years, from FY2026–27 to FY2030–31, and is a key part of the government’s broader ₹1.9 lakh crore electronics manufacturing push, alongside Semicon 2.0.
The new programme succeeds the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing, which ended in March 2026. It introduces differentiated incentives for manufacturers, additional rewards for sourcing components locally, and dedicated support for companies investing in product design and research and development (R&D).
Cabinet Clears ₹62,500 Crore Mobile Phone Manufacturing Scheme
The initiative aims to strengthen India’s position as a global smartphone manufacturing hub.
| Key Highlights | Details |
|---|---|
| Scheme | Mobile Phone Manufacturing Scheme (MPMS) |
| Total outlay | ₹62,500 crore |
| Duration | FY2026–27 to FY2030–31 (5 years) |
| Objective | Boost manufacturing, exports and local value addition |
| Approved by | Union Cabinet |
The scheme is expected to attract fresh investments while expanding India’s role in the global electronics supply chain.
Key Features of MPMS
The scheme introduces multiple incentive mechanisms.
These include:
- Production-linked incentives on eligible mobile phone sales.
- Incentive rates ranging from 2.25% to 5%.
- Additional incentive of up to 1.5% for domestic sourcing of key components and sub-assemblies.
- Extra 3% incentive for Indian brands investing in product design and R&D.
- Support for export-oriented manufacturing.
Objectives of the Scheme
| Focus Area | Expected Outcome |
|---|---|
| Manufacturing | Increase domestic mobile phone production |
| Exports | Expand India’s global smartphone exports |
| Local value addition | Reduce dependence on imported components |
| Indian brands | Encourage product design and innovation |
| Employment | Generate new manufacturing jobs |
The government aims to move India further up the electronics value chain by promoting both manufacturing and innovation.
Why the Government Introduced MPMS
The programme builds on the success of earlier electronics manufacturing initiatives.
Key goals include:
- Strengthening the “Make in India” initiative.
- Expanding global smartphone exports.
- Attracting international and domestic manufacturers.
- Building a stronger component ecosystem.
- Creating large-scale employment opportunities.
- Increasing domestic value addition in electronics.
Expected Beneficiaries
The scheme is likely to benefit:
- Global smartphone manufacturers.
- Indian mobile phone brands.
- Electronics manufacturing services (EMS) companies.
- Component suppliers.
- Design and R&D firms.
- Export-oriented manufacturers.
Companies with established manufacturing operations in India could be among the biggest beneficiaries.
Industry Impact
Several sectors could see positive spillover effects.
These include:
- Electronics manufacturing.
- Semiconductor ecosystem.
- Mobile component suppliers.
- Logistics and exports.
- Industrial infrastructure.
- Skilled manufacturing employment.
The scheme complements recent government initiatives aimed at building a complete electronics manufacturing ecosystem.
Challenges Ahead
Successful implementation will depend on:
- Faster expansion of component manufacturing.
- Competitive production costs.
- Stable policy environment.
- Skilled workforce availability.
- Global demand for smartphones.
- Efficient supply chains.
Increasing local value addition remains one of the biggest long-term objectives.
Outlook
The ₹62,500 crore Mobile Phone Manufacturing Scheme marks one of India’s largest policy interventions in electronics manufacturing. By combining production-linked incentives with additional rewards for domestic sourcing and product innovation, the government aims to transform India from a major smartphone assembly hub into a globally competitive manufacturing and design centre.
If executed successfully, the scheme could significantly increase exports, attract new investments, strengthen domestic supply chains, and generate large-scale employment. Together with Semicon 2.0, it forms the backbone of India’s strategy to build a comprehensive electronics ecosystem spanning semiconductor manufacturing, components, mobile devices, and advanced technology products.
What It Means for India’s Electronics Industry
The approval of MPMS reinforces India’s ambition to become one of the world’s leading electronics manufacturing destinations. The combination of financial incentives, local sourcing benefits, and R&D support is expected to encourage manufacturers to deepen their presence in India while increasing domestic value addition.
For investors and manufacturers, the scheme signals continued government commitment to the electronics sector. Companies involved in smartphones, EMS, semiconductor packaging, components, and industrial automation could benefit as India’s electronics manufacturing ecosystem continues to expand.
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