The Indian Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, aiming to deepen domestic value addition, strengthen supply chains and position India as a global hub for mobile phone manufacturing and innovation.
The five-year scheme, which will run from FY2026-27 to FY2030-31, succeeds the Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing, whose tenure ended on March 31, 2026.
Incentives for manufacturing and design
Under the MPMS, manufacturers will receive incentives ranging from 2.25% to 5% on eligible sales of mobile phones manufactured in India.
The scheme also provides an additional incentive of up to 1.5% for companies that source key components and sub-assemblies domestically, encouraging greater localisation of the supply chain.
To promote indigenous innovation, the government has introduced an additional 3% incentive linked to product design and research & development (R&D), with the objective of building globally competitive Indian smartphone brands and strengthening technological sovereignty.
Focus on value addition
The government said the new scheme has been designed to further scale up mobile phone production, increase domestic value addition, improve supply chain resilience and enhance India’s competitiveness in global electronics manufacturing.
The policy also seeks to encourage Indian companies to move beyond contract manufacturing by investing in product design, intellectual property creation and technology development.
Massive production target
During the five-year tenure of the scheme, India is expected to produce mobile phones worth around ₹39 lakh crore, supported by a significant increase in exports.
The government expects the scheme to generate around 60,000 direct jobs, further strengthening the electronics manufacturing ecosystem and contributing to economic growth.
Building on the PLI success
The government said the new scheme builds on the success of the Production Linked Incentive (PLI) programme, which played a transformative role in making India one of the world’s leading mobile phone manufacturing destinations.
Over the past decade, India’s electronics manufacturing sector has expanded rapidly under the Make in India initiative.
Electronics production has grown seven-fold since FY2014-15, while exports have increased 11-fold during the same period.
The sector has also emerged as a major employment generator, particularly for young men and women from rural India, with several manufacturing facilities employing thousands of workers at a single location.
Smartphones become India’s largest export
Mobile phone manufacturing has emerged as the backbone of India’s electronics industry. India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2% of the mobile phones sold in the domestic market now being manufactured within the country.
In 2025, smartphones became India’s single largest export product, overtaking traditional export leaders such as diesel fuel and cut diamonds.
The government said mobile phones now account for a significant share of India’s electronics production and exports, reinforcing the country’s position in global value chains.
Driving the next phase of growth
With the introduction of the Mobile Phone Manufacturing Scheme, the government aims to accelerate the next phase of India’s electronics manufacturing journey by encouraging higher domestic content, stronger supply chains and greater investment in design-led innovation.
The scheme is expected to help India transition from being primarily a manufacturing destination to becoming a global centre for smartphone design, research, technology development and exports.