The Union Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with a total budgetary outlay of Rs. 62,500 crore.
Spanning a five-year tenure from FY 2026–27 to FY 2030–31, the new initiative aims to succeed the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which concluded on March 31, 2026.
The MPMS is designed to scale up production, deepen domestic value addition, strengthen supply chain resilience, and enhance the global competitiveness of India’s electronics sector. Beyond manufacturing volumes, the scheme places a distinct focus on achieving technological sovereignty by supporting the growth of domestic brands, securing large economic value, and fostering Indian patents in design and research and development (R&D).
Differentiated Incentives and Sourcing Bonuses
The financial framework of the MPMS introduces a multi-layered incentive structure based on eligible sales, component sourcing, and domestic design:
- Base Incentives: The scheme offers incentive support on eligible sales for manufacturing mobile phones at differentiated rates ranging from 2.25% to 5%.
- Domestic Sourcing Bonus: To encourage a localized supply chain, an additional incentive of up to 1.5% is linked to the domestic sourcing of key components and sub-assemblies.
- Design and R&D Support: In a targeted effort to build domestic brands, an additional 3% incentive will be provided on eligible sales for localized product design and R&D activities.
Projecting Production, Export growth, and Employment
Over its five-year implementation period, the scheme is projected to drive cumulative mobile phone production in India to approximately Rs.39,00,000 crore, accompanied by a significant increase in exports.
The expansion is also expected to generate roughly 60,000 direct jobs, further contributing to employment generation and cementing India’s position as a global electronics manufacturing hub.