The Union Cabinet has approved a new Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, aiming to strengthen India’s position as a global electronics manufacturing hub. The five-year scheme is designed to increase domestic value addition, expand exports, encourage indigenous brands, and create thousands of new jobs while building on the success of earlier production-linked incentive programmes.
Five-Year Scheme To Accelerate Manufacturing
The Mobile Phone Manufacturing Scheme will run from FY 2026-27 to FY 2030-31. Manufacturers will receive incentive support ranging from 2.25% to 5% on eligible sales of mobile phones produced in India. The government has also introduced an additional incentive of up to 1.5% for companies that source more key components and sub-assemblies domestically.
Extra Incentives For Indian Brands And R&D
To encourage innovation, the scheme offers an additional 3% incentive for companies investing in product design, research and development, and the creation of Indian mobile phone brands. The objective is not only to manufacture devices in India but also to develop home-grown intellectual property and globally competitive Indian technology companies.
Ambitious Production And Employment Targets
The government expects the scheme to generate cumulative mobile phone production worth nearly ₹39 lakh crore during its tenure. It also aims to significantly increase smartphone exports while creating around 60,000 direct jobs across the manufacturing ecosystem. The initiative is expected to strengthen supply chains and improve India’s competitiveness in global electronics manufacturing.
Building On India’s Manufacturing Success
India has already emerged as the world’s second-largest mobile phone manufacturer by volume, with over 99% of phones used in the country now being manufactured domestically. Smartphones have also become India’s largest export product category, reflecting the rapid growth of the electronics sector over the past decade. The new MPMS builds on these achievements by encouraging deeper localisation and higher-value manufacturing.
What It Means For The Industry
The scheme is expected to attract fresh investments from both global and domestic manufacturers while strengthening India’s role in global supply chains. Greater domestic sourcing, higher exports, and increased investment in research and design could help India move beyond assembly towards becoming a global centre for smartphone innovation and manufacturing.
Summary
The Union Cabinet has approved the ₹62,500 crore Mobile Phone Manufacturing Scheme for FY 2026-27 to FY 2030-31. The initiative offers production, domestic sourcing, and R&D incentives to manufacturers, with the goal of generating ₹39 lakh crore in production, boosting exports, creating 60,000 direct jobs, and strengthening India’s position as a global smartphone manufacturing hub.
