NEW DELHI: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore, marking one of the government’s biggest initiatives to strengthen India’s electronics manufacturing ecosystem after the conclusion of the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing.
The new scheme, which will run for five years from FY 2026-27 to FY 2030-31, aims to significantly scale up mobile phone production, deepen domestic value addition, strengthen supply chain resilience, enhance global competitiveness, and promote the development of Indian mobile phone brands with indigenous design and research capabilities.
Under the MPMS, manufacturers will receive incentive support on eligible sales of mobile phones manufactured in India at differentiated rates ranging from 2.25 per cent to 5 per cent.
To encourage localisation, the scheme also offers an additional incentive of up to 1.5 per cent for companies sourcing key components and sub-assemblies domestically. Further, Indian brands investing in product design and research and development (R&D) will be eligible for an additional 3 per cent incentive on eligible sales, with the objective of building technological capabilities and creating Indian intellectual property.
According to the government, the scheme is designed not only to expand manufacturing capacity but also to help India achieve technological sovereignty by fostering indigenous innovation, creating patents, and capturing greater economic value within the country.
The government expects the scheme to drive cumulative mobile phone production worth approximately Rs 39 lakh crore during its five-year tenure. The MPMS is also projected to generate around 60,000 direct jobs, contributing to employment generation while reinforcing India’s status as a global electronics manufacturing hub.
Officials said the initiative is expected to further increase exports of mobile phones, which have emerged as one of India’s strongest export sectors in recent years. The approval comes after the completion of the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), whose tenure ended on March 31, 2026.
The government highlighted that under Prime Minister Narendra Modi’s ‘Make in India’ initiative, India’s electronics manufacturing has grown seven-fold since FY 2014-15, while electronics exports have increased eleven-fold during the same period.
Mobile phone manufacturing has emerged as the cornerstone of this transformation, becoming the anchor of India’s broader electronics manufacturing ecosystem. India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used in the country being manufactured domestically, according to government data.
The sector has also become a major source of employment, particularly for young workers from rural and semi-urban areas, with several manufacturing facilities employing more than 5,000 workers at a single location. The government noted that smartphones have emerged as India’s single largest exported product category in 2025, overtaking traditional export leaders such as diesel fuel and cut diamonds.
