THEBUSINESSBYTES
BUREAU
NEW
DELHI, JULY 15, 2026
In a major push to
strengthen India's position as a global electronics manufacturing powerhouse,
the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the
Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore. The five-year
scheme, spanning FY2026-27 to FY2030-31, is designed to accelerate mobile phone
production, deepen domestic value addition, enhance supply chain resilience and
promote globally competitive Indian brands.
Under the scheme,
manufacturers will receive incentive support ranging from 2.25% to 5% on
eligible sales of mobile phones produced in India. An additional incentive of
up to 1.5% will be available for increased domestic sourcing of key components
and sub-assemblies, while Indian companies investing in product design and
research and development will receive an extra 3% incentive on eligible sales
to encourage innovation and technological leadership.
The government
expects the initiative to drive cumulative mobile phone production worth nearly
₹39 lakh crore
during the scheme period, while significantly boosting exports. The MPMS is
also projected to create around 60,000 direct jobs, reinforcing the sector's
contribution to economic growth and employment generation.
The scheme builds on
the success of the Production Linked Incentive Scheme for Large Scale
Electronics Manufacturing (PLI-LSEM), which concluded on March 31, 2026, after
playing a pivotal role in transforming India into a leading global destination
for mobile manufacturing and exports.
India's electronics
sector has witnessed remarkable expansion under the government's Make in India
initiative, with electronics manufacturing increasing seven-fold and exports
rising eleven-fold since FY2014-15. Mobile phones have emerged as the
cornerstone of this growth, making India the world's second-largest mobile
phone manufacturer by volume, with 99.2% of phones used in the country now
produced domestically.
Smartphones have also
become India's largest export product category in 2025, overtaking traditional
export leaders such as diesel fuel and cut diamonds. With the launch of MPMS,
the government aims to further strengthen India's role in global value chains,
promote indigenous innovation, build globally recognised Indian brands and move
closer to achieving technological sovereignty in the fast-growing electronics
sector.
