India Unveils New ₹62,500 Crore Mobile Phone Manufacturing Scheme (MPMS) to Boost Local Production & Design
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India is charting a bold new course in electronics manufacturing with the notification of the ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS) on August 21, 2026. This ambitious initiative aims to significantly boost domestic production, enhance value addition, and champion indigenous design, solidifying India's position as a global manufacturing hub. The scheme builds upon the successes of previous incentives, promising a robust ecosystem for mobile phone production and innovation.
Introduction: India's New Leap in Mobile Manufacturing
The Indian government has taken another significant step towards bolstering its electronics manufacturing capabilities by formally notifying the Mobile Phone Manufacturing Scheme (MPMS). Announced by the Ministry of Electronics and Information Technology (MeitY) on Friday, August 21, 2026, the scheme follows its approval by the Union Cabinet on July 15. With a substantial budgetary outlay of ₹62,500 crore, the MPMS is designed to run for five years, covering the fiscal years from 2026-27 to 2030-31. This new program is a direct successor to the highly successful Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which concluded on March 31, 2026, and played a pivotal role in establishing India as a significant player in global mobile phone manufacturing and exports.
India has rapidly transformed its electronics landscape, moving from a significant importer to the world's second-largest phone manufacturer by volume. The MPMS is poised to sustain and accelerate this growth momentum, with a renewed focus on self-reliance and technological sovereignty.
What is the Mobile Phone Manufacturing Scheme (MPMS)?
The Mobile Phone Manufacturing Scheme (MPMS) is a government initiative introduced to incentivize the domestic assembly of smartphones and promote deeper local value addition within the manufacturing process. It is structured as a Production Linked Incentive (PLI) scheme, offering financial incentives on incremental sales to eligible manufacturers. The scheme's overarching goal is to enhance India's global competitiveness in mobile phone manufacturing by expanding scale, strengthening domestic supply chains, and fostering indigenous capabilities in technology, intellectual property, and design.
Key Objectives of MPMS
The MPMS has several strategic objectives aimed at transforming India into a comprehensive global electronics manufacturing hub:
- Boosting Domestic Production: To significantly increase the production volume and value of mobile phones manufactured within India.
- Deepening Value Addition: To encourage manufacturers to source more components and sub-assemblies domestically, thereby increasing local content and reducing reliance on imports.
- Enhancing Global Competitiveness: To make Indian-made mobile phones more competitive in both domestic and international markets.
- Strengthening Supply Chains: To build a robust and resilient domestic supply chain for mobile phone components.
- Fostering Indigenous Brands and IP: To support Indian-owned mobile phone brands in developing their own technology, intellectual property, and product designs.
- Generating Employment: To create a substantial number of direct and indirect job opportunities in the electronics manufacturing sector.
Scheme Structure and Incentives
The MPMS is strategically divided into two distinct Target Segments (TS) to cater to different facets of the mobile phone manufacturing ecosystem:
- Target Segment 1 (TS1) – Incentivising Mobile Phone Manufacturing: This segment focuses on incentivizing the large-scale manufacturing of mobile phones, including those produced by Electronics Manufacturing Services (EMS) companies registered in India. Under TS1, eligible manufacturers will receive base incentives ranging from 2.25% to 5% on incremental sales, with rates tapering down over the five-year tenure.
- Target Segment 2 (TS2) – Supporting Indian Mobile Phone Brands: This segment is specifically designed to bolster Indian mobile phone brands. Brands meeting the criteria for Indian ownership will enjoy a flat 5% incentive throughout the scheme's duration. Additionally, to encourage innovation and self-reliance, an extra 3% incentive will be provided for domestic design and Research & Development (R&D).
A crucial aspect of the MPMS is the provision of an additional incentive of up to 1.5% for the domestic sourcing of key components and sub-assemblies. This incentive is applicable if a firm sources domestically for at least 25% of the total mobile phone units it manufactures in a given fiscal year, further driving localisation and promoting self-reliance in the ecosystem.
Eligibility Criteria and Sales Thresholds
To ensure focused growth and incentivise genuine manufacturing scale, the MPMS has laid down specific eligibility criteria and sales thresholds:
- For Target Segment 1, mobile phone manufacturers (including EMS companies) must have recorded a minimum turnover of ₹10,000 crore in FY 2025-26. Existing brands need to achieve annual sales of at least ₹5,000 crore over and above their FY 2025-26 sales threshold each year. For instance, the incremental sales threshold for FY27 would be ₹5,000 crore, rising to ₹25,000 crore for FY31. A new brand becomes eligible after achieving annual sales of ₹10,000 crore in India, and thereafter must meet the year-on-year threshold of ₹5,000 crore. EMS companies, however, have a lower minimum turnover requirement of ₹1,000 crore in FY 2026. Incentives are primarily disbursed for sales that exceed 115% of the previous fiscal year's production.
- For Target Segment 2, applicants must have a minimum turnover of ₹1,000 crore in FY 2025-26. Critically, these Indian brands must be majority-owned by Indian citizens, incorporated in India, with intellectual property and trademarks held locally. These Indian brands are not subject to the minimum sales threshold applicable to other brands, with their baseline fixed at 2025-26. Applicants with majority Indian ownership will also benefit from a gestation period of one year.
Nurturing Indigenous Innovation and Brands
A key differentiator of the MPMS is its strong emphasis on fostering genuine Indian brands and intellectual property. Union Electronics and Information Technology Minister Ashwini Vaishnaw highlighted that for Indian brands to avail benefits under TS2, their designs must be original and not mere 'copycats'. Companies will be required to prove ownership of the intellectual property rights for the designs used in their phones. This stringent approach aims to cultivate truly indigenous design and R&D capabilities, moving beyond assembly towards complete product development within India.
Expected Impact and Future Outlook
The government anticipates a transformative impact from the MPMS. It projects a cumulative production of approximately ₹39 lakh crore by the end of the scheme's tenure in 2030-31, along with cumulative exports worth ₹15 lakh crore. The scheme is also expected to generate around 60,000 direct jobs, further contributing to economic growth and employment opportunities. Domestic value addition in mobile phone manufacturing, currently at 23%, is projected to deepen significantly.
With the MPMS, India reinforces its commitment to the 'Make in India' initiative, aiming to establish itself as a formidable global hub for mobile phone manufacturing and exports. Minister Vaishnaw expressed optimism about the emergence of three Indian brands with indigenously designed mobile phones hitting the market within the next 10-14 months, signifying a new era of technological sovereignty for the nation.