Mobile Phone Manufacturing Scheme (MPMS): Strengthening India’s Electronics Manufacturing

Mobile Phone Manufacturing Scheme (MPMS): Strengthening India’s Electronics Manufacturing

The Ministry of Electronics and Information Technology (MeitY) has notified the Mobile Phone Manufacturing Scheme (MPMS) with a total outlay of ₹62,500 crore. The scheme aims to sustain the growth of mobile phone manufacturing in India, increase domestic value addition, and promote Indian mobile phone brands.

Mobile Phone Manufacturing Scheme (MPMS)

¨     Tenure: Five years, from FY 2026–27 to FY 2030–31, effective from April 1, 2026.

¨     Objective: To enhance the global competitiveness of Indian mobile manufacturing by increasing scale, deepening the domestic supply chain, raising Domestic Value Addition (DVA) and strengthening manufacturing capabilities. The scheme also seeks to promote Indian-owned mobile brands, domestic intellectual property, product design and research and development (R&D).It follows the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), whose tenure ended on March 31, 2026.

¨     India is currently the world’s second-largest mobile phone manufacturer by volume, while 99.2% of mobile phones used in India are manufactured domestically. Smartphones emerged as India’s single-largest exported product category in 2025.

Key Features of the Scheme

¨     Two Target Segments: The scheme has Target Segment 1 (TS1) for mobile phone manufacturing and Target Segment 2 (TS2) for supporting Indian mobile phone brands. TS1 provides incentives of 2.25%–5%, while TS2 provides a 5% incentive for Indian brands.

¨     Eligibility under TS1: Mobile phone manufacturers, including Electronics Manufacturing Services (EMS) companies registered in India, require a minimum turnover of ₹10,000 crore in FY 2025–26.Existing brands must achieve incremental sales of ₹5,000 crore in FY27, rising by ₹5,000 crore annually up to ₹25,000 crore in FY31.

¨     TS1 Incentive Structure: The scheme introduces a moving baseline, with baseline sales equal to the previous financial year’s domestic sales plus 15%. Incentives are provided on eligible sales, with rates ranging from 2.75% to 2.25% for one portion and 5% to 4% for another portion over the scheme tenure.

¨     Support for Indian Brands: Under TS2, applicants require a minimum turnover of ₹1,000 crore in FY 2025–26 and must meet Indian-brand criteria. These include Indian incorporation, IP and trademarks held in India, management control by Indian citizens, more than 51% Indian ownership, and in-house R&D and design capabilities in India.

¨     Design and Domestic Sourcing Incentives: Indian brands receive an additional 3% incentive for Indian design and R&D, while both target segments can receive up to 1.5% for domestic sourcing of key components and sub-assemblies.The 1.5% comprises incentives for display modules (0.3%), camera modules (0.3%), enclosures (0.5%), batteries (0.2%) and USB cables/connectors (0.2%), subject to localisation for at least 25% of total mobile phone units in a financial year.

¨     Institutional and Non-Fiscal Support: The government may provide non-fiscal support to Indian brands, with an Empowered Committee evaluating applications and recommending support. The scheme will be implemented through a Project Management Agency (PMA), with incentive claims allowed quarterly.

Need and Significance of the Scheme

¨     Sustaining Manufacturing Momentum: PLI-LSEM helped mobile phone production reach ₹11.61 lakh crore against a ₹8.12 lakh crore target, while investment crossed ₹20,500 crore against ₹7,000 crore targeted, and MPMS provides continuity after PLI-LSEM ended in March 2026.

¨     Deepening Domestic Value Addition: Domestic value addition in mobile manufacturing has risen to around 23% from about 15%, while MPMS shifts greater focus towards localisation of components and sub-assemblies.

¨     Promoting Indian Technology and IP: The scheme supports Indian-owned brands, domestic IP, product design and R&D, helping India move from large-scale assembly towards greater technological sovereignty.

¨     Strengthening the Electronics Ecosystem: Mobile manufacturing can generate technology and skill spillovers into laptops, gaming consoles, drones, medical devices, tablets, smartwatches and other electronics-intensive sectors.

¨     Expanding India’s Global Role: Mobile phone exports grew 166 times between 2014 and 2025, while mobile phones accounted for about 61% of India’s electronics exports in FY26, and MPMS seeks to further strengthen India as a global electronics manufacturing hub.