The Ministry of Electronics and Information Technology (MeitY), Govt of India, has notified the Mobile Phone Manufacturing Scheme (MPMS) with a massive budgetary outlay of ₹62,500 crore, marking a major push to strengthen India’s position as a global electronics manufacturing powerhouse.
The five-year scheme, covering FY 2026-27 to FY 2030-31, seeks to expand manufacturing scale, increase domestic value addition (DVA), deepen the local component ecosystem and enhance the global competitiveness of India’s mobile phone industry.
Government Targets Stronger Indian Mobile Brands
The scheme is also designed to promote Indian-owned mobile phone brands and help them develop greater technological capabilities, intellectual property and design expertise.
Union Minister for Electronics and Information Technology Ashwini Vaishnaw said the initiative would provide significant momentum to Indian mobile brands, intellectual property and product design.
The Minister stressed that genuine Indian ownership would remain central to the initiative. According to the government, the brand, design and intellectual property must be Indian-owned and capable of competing with leading products in their respective market segments.
The government will undertake detailed scrutiny to establish that intellectual property is genuinely Indian-owned. Non-fiscal assistance and other support mechanisms for Indian brands will also be developed in consultation with industry stakeholders.
Two Key Target Segments Under MPMS
The Mobile Phone Manufacturing Scheme has been divided into two major target segments.
Target Segment 1 (TS1) focuses on incentivising mobile phone manufacturing, while Target Segment 2 (TS2) is specifically aimed at supporting Indian mobile phone brands.
Under TS1, eligible manufacturers will receive differentiated incentives ranging from 2.25% to 5%. TS2 provides a 5% incentive for Indian brands, along with an additional 3% incentive for Indian design and research and development (R&D).
Indian brands will also receive non-fiscal support under the scheme, strengthening their ability to compete in domestic and international markets.
Additional Incentive for Domestic Components
A key feature of MPMS is its emphasis on strengthening the domestic supply chain.
Manufacturers can receive an additional incentive of up to 1.5% for sourcing key components and sub-assemblies domestically. To qualify, the components must be localised for at least 25% of the total mobile phone units manufactured during a financial year.
The government expects this provision to encourage deeper localisation and promote genuine manufacturing capabilities within India, further advancing the country’s Atmanirbhar Bharat objective.
Eligibility Rules for Manufacturers
Under TS1, mobile phone manufacturers and Electronics Manufacturing Services (EMS) companies registered in India must have recorded a minimum turnover of Rs 10,000 crore in FY 2025-26.
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Existing brands will need to achieve an annual threshold of Rs 5,000 crore over and above their FY 2025-26 sales. New brands can become eligible after achieving annual sales of Rs 10,000 crore in India, followed by the prescribed year-on-year threshold.
For TS2, applicants must have a minimum turnover of Rs 1,000 crore in FY 2025-26 and meet the government’s definition of an Indian brand.
This includes registration or incorporation in India, intellectual property and trademarks held in India, management control by Indian citizens, more than 51% ownership by Indian citizens, and in-house design and R&D capabilities located in India.
India’s Electronics Manufacturing Has Expanded Rapidly
The new scheme builds on the transformation achieved through the government’s Make in India initiative.
Since FY 2014-15, electronics manufacturing in India has expanded seven-fold, while electronics exports have grown eleven-fold. The sector has also become a significant source of employment, particularly for young workers from rural and remote areas.
Several electronics manufacturing facilities employ thousands of people, with employment at some individual locations reaching around 20,000 workers.
Mobile phone manufacturing has been the principal driver of this expansion, with smartphones now accounting for a major portion of India’s electronics production and exports.
India Emerges as Global Mobile Manufacturing Hub
India is currently the world’s second-largest mobile phone manufacturer by volume, while around 99.2% of mobile phones used domestically are manufactured in India.
Smartphones also emerged as India’s largest exported product category in 2025, overtaking traditional major export items such as diesel fuel and cut diamonds.
The government’s earlier Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) played a crucial role in establishing India as a major global hub for mobile phone production and exports. Its tenure ended on March 31, 2026.
MPMS has now been introduced to maintain that momentum and further expand India’s manufacturing and export capabilities.
Rs 39 Lakh Crore Production Target
The government expects the new scheme to deliver substantial economic benefits over its five-year tenure.
Cumulative mobile phone production is projected to reach approximately Rs 39 lakh crore, accompanied by a significant rise in exports. The scheme is also expected to generate nearly 60,000 direct jobs.
With greater domestic sourcing, stronger Indian brands, increased investment in design and R&D, and deeper integration into global value chains, MPMS is expected to give India’s mobile manufacturing ecosystem a powerful new push.
The initiative ultimately seeks to move India beyond large-scale assembly towards high-value, technology-driven and globally competitive mobile phone manufacturing, while creating greater economic value within the country.
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