Mobile Phone Manufacturing Scheme: Objectives, Features and Expected Outcomes

India is now the world’s second-largest mobile phone manufacturer by volume in the world. The Union Cabinet approved the new Mobile Phone Manufacturing Scheme (MPMS) to increase the manufacturing of electronics and mobile Phones in India. 

The government has approved a Rs 62,500 crore budget to further scale up the production, deepen domestic value addition, strengthen supply chain resilience and enhance global competitiveness. 

India’s smartphone landscape has seen huge growth with the conclusion of the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) on March 31, 2026. Originally notified by the Ministry of Electronics and Information Technology (MeitY) in April 2020. 

Features of  Mobile Phone Manufacturing Scheme (MPMS)

• The scheme aims at building Indian brands like Micromax, Jio and Lava International to achieve technological sovereignty, capture large economic value and create Indian patents in design and R&D. 

• The scheme will be implemented from  FY 2026-27 to FY 2030-31 for the 5 years tanure. 

• MPMS provided incentive support on eligible sales for manufacturing of mobile phones in India. The incentive will be applied at different rates ranging from 2.25% to 5%.

• The additional incentive is up to 1.5% for domestic sourcing of the components and sub-assemblies.

• The scheme also provides an additional 3% incentive on eligible sales fordesign and Research and development of the product, creation and promotion of Indian brands. 

Expected Outcomes (FY 2026–27 to FY 2030–31)

The scheme will also increase exports as India is the single largest exporter of mobile products in 2025 that is more than diesel fuel and cut diamonds.  

Domestic value addition target by pushing the local manufacturing component value retention to 55%

As per the Ministry of Electronics and IT (Meity), the scheme will generate cumulative mobile phone production worth ₹39 lakh crore during five years tenure. The scheme is also expected to generate 60,000 direct and indirect jobs. It will further contribute to economic growth, employment generation and strengthening India as a global manufacturing hub.

The New initiative follows the successful conclusion of the Production-Linked Incentive(PLI) Scheme for large-scale electronics manufacturing. The first PLI offset local industrial disabilities such as high logistics costs and inadequate infrastructure by offering 4% to 6% rewards on incremental sales. 

PLI successfully transformed India into the world’s second-largest mobile phone manufacturer by volume. With 99.2% of mobile phones used in India being manufactured domestically.  

The MPMS positions the Indian electronics hardware industry to capture far greater economic value. Anchoring global supply chains within its borders by shifting the focal policy lever from basic manufacturing volumes to design integration and component localization.