Centre Notifies ₹62,500 Crore Mobile Phone Manufacturing Scheme
The Government of India has notified the ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS). The scheme aims to make India a stronger global centre for mobile phone production.
It will support large manufacturers, electronics manufacturing service providers and Indian mobile phone brands. It will also encourage companies to source more components from within India.
The scheme will operate for five years. It covers the period from the financial year 2026–27 to 2030–31.
The Ministry of Electronics and Information Technology, or MeitY, will oversee the programme. According to government estimates, it may support mobile phone production worth nearly ₹39 lakh crore and create around 60,000 direct jobs during its tenure. DD India
Mobile Phone Manufacturing Scheme at a Glance
| Particular | Details |
|---|---|
| Name of scheme | Mobile Phone Manufacturing Scheme |
| Short form | MPMS |
| Implementing ministry | Ministry of Electronics and Information Technology |
| Total outlay | ₹62,500 crore |
| Duration | Five years |
| Scheme period | FY 2026–27 to FY 2030–31 |
| Main target | Mobile phone manufacturing and Indian brands |
| Basic incentive | 2.25% to 5%, depending on the segment |
| Incentive for Indian brands | 5% |
| Additional design and R&D incentive | 3% for eligible Indian brands |
| Domestic sourcing incentive | Up to 1.5% additional incentive |
| Expected cumulative production | Around ₹39 lakh crore |
| Expected direct employment | About 60,000 jobs |
What Is the Mobile Phone Manufacturing Scheme?
The Mobile Phone Manufacturing Scheme is a production-linked incentive programme.
Under such a programme, eligible companies receive incentives based on their manufacturing and sales performance. The support is not simply given for setting up a factory. Companies must meet the prescribed conditions and production targets.
MPMS seeks to expand India’s mobile phone manufacturing capacity. It also aims to increase domestic value addition.
Domestic value addition means that a larger share of the phone’s components, technology, design and manufacturing work is produced within India.
India has already developed a large mobile phone assembly industry. However, many high-value components are still sourced from other countries. The new scheme seeks to reduce this dependence gradually.
Why Has the Government Introduced MPMS?
The earlier Production Linked Incentive Scheme for Large-Scale Electronics Manufacturing helped India attract major mobile phone manufacturers.
That scheme ended on March 31, 2026. MPMS has now been introduced to maintain the growth momentum.
The new programme has a wider focus. It is not limited to increasing the number of phones assembled in India. It also promotes domestic components, Indian brands, product design, research and intellectual property.
The scheme has the following major objectives:
- Increase mobile phone production in India.
- Expand the country’s mobile phone exports.
- Strengthen domestic component supply chains.
- Promote Indian-owned mobile phone brands.
- Encourage product design and research in India.
- Create skilled and semi-skilled employment.
- Reduce dependence on imported components.
- Increase India’s participation in global electronics value chains.
Two Target Segments Under MPMS
The scheme has been divided into two major target segments.
Target Segment 1: Mobile Phone Manufacturing
Target Segment 1, or TS1, covers mobile phone manufacturers. It can also include Electronics Manufacturing Services companies registered in India.
EMS companies manufacture electronic products on behalf of other brands.
Under TS1, eligible companies may receive incentives ranging from 2.25% to 5%. The actual rate will depend on the applicable category and fulfilment of scheme conditions.
This segment mainly focuses on increasing production scale and exports.
Target Segment 2: Indian Mobile Phone Brands
Target Segment 2, or TS2, is designed for eligible Indian mobile phone brands.
Companies selected under this category may receive a 5% incentive. They can also receive an additional incentive of 3% for eligible product design and research and development activities.
Applicants under TS2 may be given a one-year gestation period. This gives Indian brands time to prepare their manufacturing, design and market operations before meeting the required targets.
The government may also provide non-financial support to eligible Indian brands.
Eligibility Conditions
The eligibility requirements are different for the two target segments.
Eligibility Under Target Segment 1
An applicant under TS1 must be a mobile phone manufacturer registered in India. Eligible applicants may include EMS providers.
The company must have recorded a minimum turnover of ₹10,000 crore in FY 2025–26.
An existing brand must achieve annual sales of at least ₹5,000 crore over its FY 2025–26 base sales.
A new brand can become eligible after recording annual sales of ₹10,000 crore in India. It must then meet the prescribed year-on-year sales threshold.
Eligibility Under Target Segment 2
An applicant under TS2 must have a minimum turnover of ₹1,000 crore in FY 2025–26.
It must also satisfy the conditions prescribed for an Indian brand. These include:
- The company must be registered or incorporated in India.
- Indian citizens must hold more than 51% of its shareholding.
- Its management control must remain with Indian citizens.
- Its trademarks and intellectual property must be owned in India.
- It must have product design and research capabilities in India.
Indian brands are not required to meet a minimum sales-volume condition at the selection stage. Their selection will be examined by an Empowered Committee.
Incentive Structure
The MPMS offers different incentives for manufacturing, domestic sourcing and Indian product development.
| Area | Available incentive |
|---|---|
| Manufacturing under TS1 | 2.25% to 5% |
| Eligible Indian brands under TS2 | 5% |
| Indian design and R&D under TS2 | Additional 3% |
| Domestic sourcing under TS1 and TS2 | Up to an additional 1.5% |
The incentives will be calculated on eligible sales. Sales and incentives will be considered on a brand-wise basis.
Companies will have to satisfy the conditions specified in the official guidelines. The maximum headline rate may not automatically apply to every manufacturer.
Extra Incentive for Domestic Components
A major feature of MPMS is the additional incentive for domestic sourcing.
Eligible manufacturers can receive an extra incentive of up to 1.5% for sourcing specified components and sub-assemblies from India.
To qualify, the prescribed components must be localised in at least 25% of the total mobile phone units manufactured by the applicant during a financial year.
The localisation effort may cover important areas such as:
- Camera modules
- Display assemblies
- Battery cells and battery-related systems
- Mechanical components
- Printed circuit board assemblies
- Chargers, cables and connectors
- Enclosures and structural parts
- Other notified sub-assemblies
This incentive can increase demand for Indian component makers. It may also encourage international suppliers to establish production facilities in India.
Special Support for Indian Mobile Brands
India has become a major mobile phone production centre. However, a large portion of the market is still controlled by foreign-owned brands.
MPMS seeks to address this gap.
Under TS2, eligible Indian brands can receive a 5% manufacturing incentive. They may also get an additional 3% incentive for product design and research and development.
This support can help domestic companies invest in:
- Hardware and industrial design
- Software integration
- Prototype development
- Product testing and validation
- Cybersecurity and device protection
- User-interface development
- Intellectual property creation
- Products designed for Indian consumers
- Devices for international markets
The government has stressed that Indian ownership must be genuine. A company may have to prove that its brand, design and intellectual property are controlled from India.
Expected Production, Exports and Employment
The government expects the scheme to generate cumulative mobile phone production of nearly ₹39 lakh crore.
Earlier estimates connected with the scheme also projected exports of about ₹15 lakh crore over its five-year period. The Economic Times
Around 60,000 direct jobs are expected to be created.
Indirect employment could also emerge in:
- Component manufacturing
- Transportation and logistics
- Warehousing
- Packaging
- Equipment maintenance
- Product testing
- Industrial design
- Software development
- Retail and after-sales services
Large electronics factories can provide employment to thousands of workers at a single location. Many of these jobs may benefit young workers from smaller cities and rural areas.
India’s Growth as a Mobile Phone Manufacturer
India is currently the world’s second-largest mobile phone manufacturer by volume.
According to the government, around 99.2% of the mobile phones used in India are now manufactured domestically. Smartphones also became India’s largest exported product category in 2025.
Electronics manufacturing in India has grown about seven times since FY 2014–15. Electronics exports have increased nearly eleven times during the same period.
Mobile phones have played a major role in this transformation.
The earlier policy phase helped India move from being highly dependent on imported finished phones to becoming a major assembly and export centre. MPMS represents the next stage.
The new focus is on increasing the amount of technology, components, design and intellectual property created within the country.
How MPMS Differs from the Earlier PLI Scheme
| Earlier PLI approach | MPMS approach |
|---|---|
| Focused mainly on large-scale manufacturing | Covers manufacturing, components, design and Indian brands |
| Encouraged production and exports | Adds a stronger domestic value-addition focus |
| Helped attract global manufacturers | Also provides special support to Indian brands |
| Expanded phone assembly capacity | Seeks deeper component localisation |
| Focused on manufacturing scale | Includes research, design and intellectual property |
The earlier scheme laid the foundation for large-scale production. MPMS seeks to strengthen the entire mobile phone ecosystem.
Relationship with the Electronics Components Manufacturing Scheme
MPMS will work alongside the Electronics Components Manufacturing Scheme, or ECMS.
The two programmes have complementary roles.
MPMS supports the production and sale of finished mobile phones. ECMS supports the domestic production of electronic components and sub-assemblies.
Together, these schemes may help India develop a more complete electronics supply chain.
For example, a mobile phone manufacturer may receive support under MPMS for producing finished devices. Its Indian component supplier may receive assistance under ECMS for manufacturing displays, camera parts, batteries or circuit-board components.
This combined approach can improve domestic value addition.
Why the Scheme Is Important for India
Stronger Supply Chains
Greater domestic sourcing can reduce the risk of disruptions caused by international conflicts, shipping delays or sudden trade restrictions.
Higher Domestic Value Addition
Assembling imported parts creates jobs, but domestic production of components retains more economic value within the country.
Growth of Indian Brands
Special incentives can help Indian companies build their own products, trademarks and technologies.
Export Expansion
Large production volumes and competitive costs can make India an important global mobile phone export base.
Employment Creation
The industry can generate jobs in manufacturing, engineering, logistics, testing, design and software.
Technology Development
Support for research and product design can help Indian companies move beyond contract manufacturing.
Reduced Import Dependence
Local production of components can reduce the country’s dependence on imported electronic parts.
Possible Challenges
The scheme offers major opportunities, but its success will depend on effective implementation.
Dependence on Imported High-Value Parts
India still imports several important components. These include advanced chips, displays, sensors and specialised camera parts.
Maintaining Global Quality
Domestic suppliers must meet strict international standards for cost, reliability and performance.
Research and Development Capacity
Creating a global mobile phone brand requires strong engineering teams, patents, software support and continuous innovation.
Price Competition
The mobile phone market is highly competitive. Indian brands must offer good products at attractive prices.
Supplier Development
Component manufacturers may require large investments, technical partnerships and long approval processes.
Genuine Localisation
Authorities will have to ensure that domestic sourcing represents real manufacturing in India and not minor processing or relabelling.
Significance for Indian Consumers
The scheme may create several long-term benefits for consumers.
Greater domestic production can improve the availability of mobile phones. Competition among manufacturers may also support affordable pricing.
Indian brands may design devices for local requirements. These could include regional-language support, longer battery life, stronger durability and affordable repair services.
However, an incentive scheme does not guarantee an immediate reduction in phone prices. Final prices will continue to depend on component costs, taxes, exchange rates, technology and market competition.
Significance for Competitive Examinations
The scheme is important for UPSC, SSC, banking, railways and state-level examinations.
Students should remember these points:
- MPMS stands for Mobile Phone Manufacturing Scheme.
- It has an outlay of ₹62,500 crore.
- It is administered by MeitY.
- It will operate from FY 2026–27 to FY 2030–31.
- TS1 supports mobile phone manufacturing.
- TS2 supports eligible Indian mobile phone brands.
- The scheme offers an additional domestic sourcing incentive of up to 1.5%.
- The localisation condition applies to at least 25% of manufactured units.
- Expected cumulative production is around ₹39 lakh crore.
- The scheme may create approximately 60,000 direct jobs.
- India is the world’s second-largest mobile phone manufacturer by volume.
Frequently Asked Questions
What is the Mobile Phone Manufacturing Scheme?
It is a five-year production-linked incentive scheme that supports mobile phone manufacturing, domestic component sourcing and Indian mobile phone brands.
What is the total outlay of MPMS?
The scheme has a total budgetary outlay of ₹62,500 crore.
Which ministry will implement the scheme?
The Ministry of Electronics and Information Technology will implement it.
What is the duration of the scheme?
It will operate from FY 2026–27 to FY 2030–31.
What are TS1 and TS2?
TS1 supports mobile phone manufacturers. TS2 supports eligible Indian mobile phone brands.
What is the additional incentive for domestic sourcing?
Eligible companies can receive an additional incentive of up to 1.5%.
What is the localisation requirement?
Specified domestic components must be used in at least 25% of the mobile phone units manufactured during a financial year.
How many jobs could the scheme create?
The government expects around 60,000 direct employment opportunities.
Conclusion
The ₹62,500 crore Mobile Phone Manufacturing Scheme marks the next stage of India’s electronics manufacturing journey.
India has already become a major centre for mobile phone assembly and exports. The new scheme aims to deepen that progress.
Its emphasis is on domestic components, Indian brands, research, product design and intellectual property. This can help India capture a larger share of the global mobile phone value chain.
The scheme’s success will depend on genuine localisation, competitive component manufacturing and strong implementation. If these goals are achieved, MPMS could strengthen India’s position as a global electronics manufacturing hub.