Govt notifies ₹62,500-crore mobile phone scheme, targets ₹39 lakh crore production in 5 years
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The government on Friday notified the ₹62,500-crore Mobile Phone Manufacturing Scheme (MPMS), launching a five-year incentive programme aimed at scaling up handset production in India, increasing domestic value addition and helping Indian brands expand globally. The scheme will be effective from April 1, 2026, and run through FY31.
Vaishnaw said India has moved from being a mobile phone importer to a net exporter and is now the world's second-largest mobile phone manufacturer by volume, with 99.2% of handsets used domestically manufactured in the country.
The scheme targets cumulative mobile phone production of around ₹39 lakh crore during its tenure and is expected to generate nearly 60,000 direct jobs, Electronics and IT Minister Ashwini Vaishnaw said. He said electronics manufacturing in India has risen seven-fold since 2014, while exports have increased 11 times.
Incentives linked to production, local sourcing
Under MPMS, manufacturers will receive incentives ranging from 2.25% to 5% on eligible sales of mobile phones made in India. An additional incentive of up to 1.5% will be available for sourcing specified components and sub-assemblies domestically.
The scheme also provides an additional 3% incentive on eligible sales for product design and research and development, aimed at encouraging Indian companies to build proprietary products, patents and brands.
Indian mobile phone brands will be eligible for incentives of up to 5%, with the government seeking to support their expansion into international markets.
₹10,000 crore turnover threshold for manufacturers
The scheme has separate eligibility criteria for manufacturers and electronics manufacturing services (EMS) companies. Mobile phone manufacturers must have reported a minimum ₹10,000-crore turnover in FY26, while EMS players need a minimum turnover of ₹1,000 crore.
Existing Indian brands seeking incentives will also have to achieve incremental sales of ₹5,000 crore over their FY26 sales in each year for which they claim benefits. New applicants under the Indian-brand segment will get a one-year gestation period to scale operations before becoming eligible for incentives.
MPMS builds on ₹11.61 lakh crore PLI output
The new scheme follows the PLI Scheme for Large Scale Electronics Manufacturing, whose tenure ended on March 31, 2026. Under the earlier programme, mobile phone production reached ₹11.61 lakh crore, against a target of ₹8.12 lakh crore, while investment crossed ₹20,500 crore against the ₹7,000-crore target.
MeitY Secretary S. Krishnan said domestic value addition in mobile manufacturing has risen from around 15% to 23%. He added that about $14 billion has been invested across India's electronics ecosystem since PLI 1.0 was launched, supporting nearly 12 lakh jobs.
Industry sees shift towards design-led manufacturing
Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA), said the notification of the MPMS marks a turning point for India's electronics industry by shifting the focus from volume-led assembly towards deeper, design-led domestic value addition.
He said the additional 1.5% incentive for localising critical sub-assemblies, including camera modules, display assemblies, mechanics and battery cells, along with the 3% incentive for domestic R&D and product design under Target Segment 2, could help scale indigenous intellectual property and create Indian mobile brands.
Chandak said MPMS, when aligned with the Electronics Component Manufacturing Scheme (ECMS) and the Semicon India Programme, could create an end-to-end electronics ecosystem. He described the three schemes as a "Sand-to-Systems" value chain, with MPMS driving end-system demand, ECMS scaling sub-systems and PCBs, and the semiconductor programme supporting silicon fabrication, packaging and fabless design.
According to him, the integrated approach could help retain greater economic value in India, support technology exports and strengthen the country's position in the electronics, system design and manufacturing (ESDM) sector.