The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Mobile Phone Manufacturing Scheme (MPMS) with a total budgetary outlay of ₹62,500 crore. The new initiative aims to strengthen India's position as a global mobile manufacturing hub by expanding domestic production, increasing local value addition, building resilient supply chains, and encouraging the development of Indian smartphone brands.
The five-year scheme will be implemented from FY2026-27 to FY2030-31 and succeeds the Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing, which concluded on March 31, 2026. According to official government information, the new programme has been designed to build on the momentum created by the earlier PLI initiative while addressing the next phase of growth for India's electronics manufacturing ecosystem.
Incentives to Boost Manufacturing and Innovation
Under the MPMS, manufacturers will receive incentive support on eligible sales at rates ranging from 2.25% to 5%, depending on the category and level of manufacturing activity. The scheme also offers an additional incentive of up to 1.5% for companies that increase domestic sourcing of key components and sub-assemblies, encouraging deeper localisation across the supply chain.
To promote indigenous innovation, the government has introduced an additional 3% incentive linked to product design and research & development. The move is intended to help Indian companies develop their own intellectual property, strengthen technological capabilities, and establish globally competitive smartphone brands.
Focus on Local Value Addition and Supply Chain Resilience
According to the government, the MPMS is designed not only to increase manufacturing volumes but also to expand India's domestic electronics ecosystem. By encouraging local sourcing of critical components, the scheme seeks to reduce import dependence while strengthening India's manufacturing supply chain.
Industry observers believe the initiative could further attract global smartphone manufacturers and component suppliers to expand their operations in India, while also providing opportunities for domestic companies to move higher up the value chain through design, engineering, and product innovation.
Production and Employment Targets
As per official projections, the scheme is expected to generate cumulative mobile phone production worth approximately ₹39 lakh crore during its implementation period. It is also expected to significantly boost smartphone exports while creating nearly 60,000 direct employment opportunities across the manufacturing sector.
According to government estimates, the programme will contribute to economic growth, expand manufacturing capacity, and reinforce India's role in global electronics supply chains.
Building on India's Manufacturing Success
India has witnessed rapid growth in electronics manufacturing over the past decade under the Make in India initiative. According to official data, electronics manufacturing has expanded sevenfold since FY2014-15, while electronics exports have increased eleven times during the same period.
Mobile phones have emerged as the cornerstone of this transformation. India is now the world's second-largest mobile phone manufacturer by volume, with nearly 99.2% of mobile phones sold domestically being manufactured within the country.
Government data also indicates that smartphones became India's largest export product category in 2025, surpassing traditional export sectors such as diesel fuel and cut diamonds. The continued expansion of mobile manufacturing is expected to play a crucial role in strengthening India's position as a global electronics manufacturing destination.
Driving India's Next Phase of Electronics Growth
The approval of the Mobile Phone Manufacturing Scheme reflects the government's continued focus on expanding India's electronics manufacturing capabilities beyond assembly into high-value design, component manufacturing, and intellectual property creation.
With incentives for production, localisation, and innovation, the MPMS is expected to support the next phase of growth for India's mobile manufacturing industry while enhancing the country's competitiveness in the global smartphone market.
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