India notifies ₹62,500 crore mobile manufacturing scheme to deepen domestic production

Ziraat Times Team Report

New Delhi, August 21: The Government of India has notified the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, aimed at enhancing the global competitiveness of India’s mobile phone manufacturing sector, deepening domestic value addition and strengthening indigenous manufacturing capabilities.

The five-year scheme, covering FY 2026-27 to FY 2030-31, is also intended to support the emergence of Indian-owned mobile phone brands, promote domestic intellectual property, design and research and development, and generate employment.

Union Minister for Electronics and Information Technology Ashwini Vaishnaw said India could see its first strong indigenous mobile phone brand by mid-2027, stressing that genuine Indian ownership of brands, intellectual property and design would be central to the initiative.

Vaishnaw said the government would undertake a detailed evaluation to ensure that intellectual property is genuinely Indian-owned, while non-fiscal and other support measures would be developed in consultation with industry.

Two target segments

The MPMS has two target segments. Target Segment 1 (TS1) will incentivise mobile phone manufacturing, while Target Segment 2 (TS2) will support Indian mobile phone brands.

Under TS1, the scheme provides differentiated incentives ranging from 2.25% to 5%. Under TS2, eligible Indian brands will receive an incentive of 5%, with an additional 3% incentive for Indian design and R&D. The scheme will also provide non-fiscal support to Indian brands.

An additional incentive of up to 1.5% will be available to manufacturers in both segments for domestic sourcing of key components and sub-assemblies, subject to prescribed localisation requirements.

The scheme will be open to mobile phone manufacturers, including Electronics Manufacturing Services (EMS) providers, registered in India. Sales and incentives payable to applicants will be computed on a brand-wise basis.

Eligibility for manufacturers and Indian brands

For TS1, applicants must have a minimum turnover of ₹10,000 crore in FY 2025-26. Existing brands will have to meet an annual sales threshold of ₹5,000 crore over and above their FY 2025-26 sales.

A new brand will become eligible after achieving annual sales of ₹10,000 crore in India, following which it will have to meet the prescribed year-on-year threshold of ₹5,000 crore.

For TS2, applicants must have a minimum turnover of ₹1,000 crore in FY 2025-26 and meet the criteria for an Indian brand.

These include registration or incorporation in India, ownership of intellectual property and trademarks within India, management control by Indian citizens, more than 51% shareholding held by Indian citizens, and in-house R&D and design capabilities in India.

Focus on domestic sourcing

The government has also sought to encourage deeper localisation of the mobile phone supply chain by offering an additional incentive of up to 1.5% for domestic sourcing of key components and sub-assemblies.

To qualify, such components must be localised for at least 25% of the total mobile phone units manufactured in a financial year.

The measure is intended to promote greater domestic manufacturing of components and reduce dependence on imported inputs, thereby increasing domestic value addition across the mobile phone ecosystem.

India emerges as major mobile manufacturing hub

The government said the Make in India initiative has helped electronics manufacturing grow seven-fold and electronics exports eleven-fold since FY 2014-15.

Mobile phone manufacturing has been a major driver of this expansion, with manufacturing facilities emerging as significant sources of employment, including in smaller towns and rural areas. Some manufacturing facilities employ more than 5,000 people at a single location, while employment at some facilities has reached 20,000.

India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2% of mobile phones used in the country being Made in India, according to the government.

Smartphones also emerged as India’s largest exported product category in 2025, surpassing traditional leading export items such as diesel fuel and cut diamonds.

PLI scheme paved way for new initiative

The government said the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) played a catalytic role in establishing India as a global hub for mobile phone manufacturing and exports.

The PLI-LSEM scheme concluded on March 31, 2026. The new MPMS is intended to sustain the sector’s growth momentum while further increasing production, exports, domestic value addition and Indian ownership of brands and intellectual property.

₹39 lakh crore production, 60,000 jobs projected

During the five-year tenure of the MPMS, cumulative mobile phone production in India is expected to reach approximately ₹39 lakh crore, accompanied by a significant increase in exports.

The scheme is also expected to generate around 60,000 direct jobs, while strengthening India’s position as a global electronics manufacturing hub.

The government said the scheme would ultimately seek to move India beyond large-scale assembly towards deeper domestic value addition, indigenous design and R&D, and globally competitive Indian-owned mobile phone brands.