The Ministry of Electronics and Information Technology (MeitY) has notified the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, aimed at enhancing India’s global competitiveness, deepening domestic value addition and strengthening the country’s mobile phone manufacturing ecosystem.
The five-year scheme, covering FY 2026-27 to FY 2030-31, seeks to expand manufacturing scale, strengthen domestic supply chains and support Indian mobile phone brands in developing indigenous technology, intellectual property and design capabilities.
Union Electronics and Information Technology Minister Ashwini Vaishnaw said the scheme would provide a significant boost to Indian-owned mobile brands, intellectual property and product design.
He stressed that genuine Indian ownership of the brand, design and intellectual property would be essential for supported companies to compete with leading products in their respective market segments. The government, he said, would undertake detailed evaluations to ensure that intellectual property is genuinely Indian-owned, while non-fiscal and other support measures would be developed in consultation with industry.
Electronics manufacturing growth
The government’s Make in India initiative has helped electronics manufacturing grow seven-fold and electronics exports increase eleven-fold since FY 2014-15.
The electronics manufacturing sector has also emerged as a major source of employment, particularly for young people from rural areas. Several manufacturing facilities employ more than 5,000 people at a single location, with employment at some facilities reaching 20,000.
Mobile phone manufacturing has been a major driver of this growth, with handsets accounting for a significant share of India’s electronics production and exports and contributing to the country’s integration into global value chains.
India is currently 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. Smartphones emerged as India’s largest exported product category in 2025, surpassing traditional leading export items such as diesel fuel and cut diamonds.
The Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) played a key role in establishing India as a global hub for mobile phone manufacturing and exports. The scheme’s tenure ended on March 31, 2026.
The MPMS has been introduced to sustain this growth momentum and further scale up domestic mobile phone production.
Two Target Segments
The MPMS has two target segments, with the first, Target Segment 1 (TS1), focused on incentivising mobile phone manufacturing, while Target Segment 2 (TS2) is aimed at supporting Indian mobile phone brands. Under TS1, the scheme provides differentiated incentives ranging from 2.25 per cent to 5 per cent. Under TS2, Indian brands will receive a 5 per cent incentive, along with an additional 3 per cent incentive for Indian design and research and development (R&D).
The scheme will also provide non-fiscal support to Indian brands.
An additional incentive of up to 1.5 per cent will be available to both target segments for domestic sourcing of key components and sub-assemblies.
Applicants must be mobile phone manufacturers registered in India, including Electronics Manufacturing Services (EMS) providers. Sales and incentives under the scheme will be calculated on a brand-wise basis.
Applicants under TS2 may also be granted a one-year gestation period.
Eligibility criteria
Under TS1, mobile phone manufacturers, including EMS companies registered in India, must have recorded a minimum turnover of ₹10,000 crore in FY 2025-26.
Existing brands must achieve annual sales of at least ₹5,000 crore over and above their FY 2025-26 sales threshold. A new brand will become eligible after achieving annual sales of ₹10,000 crore in India and must thereafter meet the year-on-year threshold of ₹5,000 crore.
Under TS2, applicants must have a minimum turnover of ₹1,000 crore in FY 2025-26 and meet the criteria prescribed for an Indian brand.
These criteria include registration or incorporation in India, ownership of intellectual property and trademarks in India, management control by Indian citizens, more than 51 per cent shareholding held by Indian citizens, and in-house R&D and design capabilities in the country.
Incentive for domestic sourcing
The scheme provides an additional incentive of up to 1.5 per cent for domestic sourcing of key components and sub-assemblies to deepen localisation and promote self-reliance in the mobile phone manufacturing ecosystem.
To qualify, the components must be localised for at least 25 per cent of the total mobile phone units manufactured by an applicant in a financial year.
The incentive is intended to encourage deeper domestic manufacturing and strengthen the local component supply chain.
Expected outcomes
During the scheme’s tenure, cumulative mobile phone production in India is expected to reach approximately ₹39 lakh crore, accompanied by a significant increase in exports.
The MPMS is also expected to generate around 60,000 direct jobs, while supporting broader economic activity, strengthening domestic manufacturing capabilities and consolidating India’s position as a global electronics manufacturing hub.
