The five-year programme offers incentives of up to 5 per cent on eligible mobile phone sales, with additional benefits for local sourcing, product design and research and development
The government has notified the Rs 62,500-crore Mobile Phone Manufacturing Scheme (MPMS), operationalising a five-year incentive programme aimed at expanding handset production, increasing domestic value addition and strengthening local supply chains.
The scheme will take effect from 1 April 2026 and remain in force until FY31, Ministry of Electronics and Information Technology Secretary S Krishnan said. Under the programme, manufacturers can receive incentives of 2.25 per cent to 5 per cent on eligible sales of mobile phones produced in India.
Incentives For Local Sourcing
Manufacturers can also claim an additional incentive of up to 1.5 per cent for sourcing specified components and sub-assemblies domestically. The Cabinet-approved framework further offers a 3 per cent incentive on eligible sales for product design and research and development activities aimed at developing Indian mobile brands.
Indian handset brands will be eligible for incentives of up to 5 per cent as the government seeks to support their expansion into international markets, Krishnan said.
The Union Cabinet approved the scheme on 15 July with an outlay of Rs 62,500 crore. Over its five-year tenure, the government expects MPMS to support cumulative mobile phone production worth around Rs 39 lakh crore and generate about 60,000 direct jobs.
Building On PLI Gains
MPMS replaces the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), whose tenure ended on 31 March 2026. While the earlier scheme focused on scaling up electronics and mobile phone manufacturing, the new programme places greater emphasis on domestic sourcing of components and sub-assemblies.
According to figures shared by Krishnan, mobile phone production under the first phase of the PLI scheme reached Rs 11.61 lakh crore, exceeding the target of Rs 8.12 lakh crore. Investment under the programme crossed Rs 20,500 crore, compared with the targeted Rs 7,000 crore.
The earlier scheme attracted global handset makers and contract manufacturers, including Samsung and companies producing Apple devices in India.
Krishnan said around USD 14 billion has been invested across India’s electronics ecosystem since the first phase of the PLI scheme began, while mobile phone manufacturing now supports about 12 lakh jobs.
Focus On Value Addition
The new scheme seeks to increase the domestic share of mobile phone components and sub-assemblies. Domestic value addition in mobile phone manufacturing has increased from around 15 per cent to 23 per cent, Krishnan said, with the additional sourcing incentive intended to encourage manufacturers to further develop local supply chains.
The government says India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used in the country manufactured domestically.
Krishnan said mobile phone exports grew 166 times between 2014 and 2025, recording a compound annual growth rate of 59 per cent. Mobile phones accounted for around 61 per cent of India’s total electronics exports in FY26, he added.
The transition to MPMS follows a sharp rise in smartphone exports, with smartphones emerging as India’s largest exported product category in 2025, according to the Ministry of Electronics and Information Technology.
Krishnan said the new scheme is intended to increase the scale and global competitiveness of India’s mobile manufacturing industry while deepening the domestic supply chain.
