Government Notifies ₹62,500 Crore Scheme To Boost Mobile Manufacturing
India is taking its next major step in electronics manufacturing with the notification of the Mobile Phone Manufacturing Scheme (MPMS), a ₹62,500 crore programme designed to increase domestic value...
India is taking its next major step in electronics manufacturing with the notification of the Mobile Phone Manufacturing Scheme (MPMS), a ₹62,500 crore programme designed to increase domestic value addition, strengthen supply chains and reinforce the country’s position in the global mobile manufacturing landscape, as reported by DD India.
The five-year scheme will operate from FY 2026-27 to FY 2030-31. Beyond increasing production volumes, its larger objective is to help Indian companies move further up the value chain by developing domestic brands, product designs, technology and intellectual property.
From Assembly To Greater Value Creation
The new programme comes after a decade of rapid expansion in India’s electronics sector. According to DD India, mobile phone production rose from ₹18,900 crore in 2014-15 to ₹6.27 lakh crore in 2025-26, representing a 33-fold increase. Mobile phone exports also climbed from ₹1,566 crore to ₹2.60 lakh crore over the same period.
The transformation has also changed India’s position in the global market. The country is now the world’s second-largest mobile phone manufacturer by volume, while 99.2% of mobile phones used in India are manufactured domestically. Smartphones became India’s largest exported product category in 2025, overtaking established export categories such as diesel fuel and cut diamonds.
The growth has been accompanied by a substantial expansion of manufacturing capacity. DD India reported that India had moved from just two mobile manufacturing units in 2014 to more than 300, while the sector has become a major source of employment across the electronics value chain.
Building Indian Brands
One of the most significant aspects of MPMS is its focus on Indian-owned mobile brands.
Union Electronics and Information Technology Minister Ashwini Vaishnaw has emphasised that companies seeking support should demonstrate genuine Indian ownership of their brands, designs and intellectual property. The objective is to encourage businesses that can develop products and technology in India rather than limiting the country’s role to manufacturing alone.
Under the scheme, Indian brands will have to satisfy conditions relating to incorporation, ownership of intellectual property and trademarks, management control and Indian shareholding, alongside domestic design and R&D capabilities.
This represents an important shift in policy emphasis: from “Make in India” towards creating greater economic value in India.
Two Tracks For Industry
MPMS has been structured around two distinct target segments.
Target Segment 1 (TS1) focuses on mobile phone manufacturing, including Electronics Manufacturing Services providers. Eligible manufacturers can receive differentiated incentives ranging from 2.25% to 5%, depending on the applicable criteria.
Target Segment 2 (TS2) is intended for Indian mobile phone brands. Businesses in this category are eligible for a 5% incentive, and an additional 3% incentive is provided for those that focus on Indian design and research and development.
The scheme also allows an additional incentive of up to 1.5% for domestic sourcing of key components and sub-assemblies. The measure is intended to encourage manufacturers to source more inputs locally and build a stronger domestic component ecosystem.
Stricter Entry Conditions
The programme has established significant eligibility thresholds.
For TS1, manufacturers and EMS companies registered in India need to have recorded a minimum turnover of ₹10,000 crore in FY 2025-26. Existing brands must subsequently generate annual sales of at least ₹5,000 crore above their FY 2025-26 threshold, while a new brand must first achieve annual sales of ₹10,000 crore in India before meeting the subsequent year-on-year threshold.
TS2 has a lower entry threshold, requiring applicants to have a minimum turnover of ₹1,000 crore in FY 2025-26 and satisfy the prescribed Indian-brand conditions. These include Indian incorporation or registration, Indian ownership of intellectual property and trademarks, management control by Indian citizens, more than 51% shareholding by Indian citizens, and in-house R&D and design capabilities in India.
Applicants under TS2 may also receive a one-year gestation period, providing additional time to establish operations and meet the scheme’s requirements.
Local Components At The Centre
The component ecosystem is critical to the next stage of India’s electronics manufacturing journey.
Under MPMS, manufacturers can qualify for the additional 1.5% incentive linked to domestic sourcing. To qualify, the specified components must be localised for at least 25% of the total mobile phone units produced by an applicant during a financial year.
Building On The PLI Legacy
The MPMS follows the completion of the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), whose tenure ended on March 31, 2026.
PLI-LSEM played a central role in expanding India’s mobile manufacturing and export ecosystem. DD India reported that mobile phone production under the broader PLI framework increased substantially, while mobile phone imports declined by nearly 77% and domestic manufacturing reached around 99.2% of phones used in India.
The new scheme is therefore less a departure from the previous strategy and more an attempt to take the ecosystem into its next phase—one focused on localisation, domestic brands and higher-value capabilities.
Scale, Exports And Employment
The government expects the MPMS to generate considerable economic activity during its five-year tenure. Cumulative mobile phone production is projected to reach approximately ₹39 lakh crore, alongside a significant expansion in exports. The scheme is also expected to create around 60,000 direct jobs.
These targets build on an electronics manufacturing sector that has already become a major employment generator. DD India has reported that the broader electronics manufacturing industry created nearly 25 lakh jobs over the past decade, while the mobile manufacturing ecosystem supports around 12 lakh direct and indirect jobs across its value chain.
The Next Phase Of India’s Electronics Story
India’s mobile manufacturing journey has already moved from import dependence to large-scale domestic production and export competitiveness. The next challenge is more ambitious: ensuring that a greater proportion of the technology, components, design and intellectual property behind those products is created and owned in India.
The ₹62,500 crore MPMS is designed around that transition.
If the programme succeeds, India’s mobile phone industry could increasingly evolve from a manufacturing destination into a broader technology and product ecosystem—where Indian companies design products, own intellectual property, develop components, conduct R&D and compete in international markets.
The emphasis is no longer simply on making more phones in India. It is on creating more value from every phone made in India.
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