India's Rs 62,500 crore mobile manufacturing plan: What does the new scheme mean

The scheme aims to enhance global competitiveness by increasing the scale of mobile phone manufacturing, deepening the domestic supply chain through higher Domestic Value Addition (DVA) and strengthening India's manufacturing capabilities.

The MPMS will also support Indian mobile phone brands in achieving greater technological sovereignty, capturing a larger share of economic value and encouraging domestic patents in design and research and development (R&D). The scheme is also expected to generate employment opportunities.

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

The electronics manufacturing sector has also emerged as a major source of employment, particularly for young men and women from rural areas. Several manufacturing facilities employ more than 5,000 people at a single location, while employment at some facilities has reached 20,000.

Mobile phone manufacturing has been a key driver of this growth. Mobile phones now account for a major share of India's electronics production and exports, strengthening the country's position in global value chains.

According to the government, India is now the world's second-largest mobile phone manufacturer by volume, with 99.2% of mobile phones used in India being manufactured domestically.

The Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) played a key role in establishing India as a global hub for mobile phone manufacturing and exports. The scheme's tenure ended on March 31, 2026.

To sustain the momentum and further scale up mobile phone production, the government has now notified the MPMS.

Key features of the Mobile Phone Manufacturing Scheme

The MPMS has two target segments:

Target Segment 1 (TS1): Incentivising mobile phone manufacturing.

Target Segment 2 (TS2): Supporting Indian mobile phone brands.

The scheme will be operational for five years, from FY 2026-27 to FY 2030-31. Applicants under TS2 may be granted a gestation period of one year.

For TS1, the scheme provides differentiated incentives ranging from 2.25% to 5%.

For TS2, Indian brands will receive an incentive of 5%, along 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 for domestic sourcing of key components and sub-assemblies under both target segments.

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

Eligibility criteria

Under TS1, mobile phone manufacturers, including EMS companies registered in India, must have achieved a minimum turnover of Rs 10,000 crore in FY 2025-26.

Existing brands must achieve annual sales of at least Rs 5,000 crore above their FY 2025-26 sales during the scheme period.

A new brand will become eligible after achieving annual sales of Rs 10,000 crore in India and must subsequently meet the year-on-year threshold of Rs 5,000 crore.

Under TS2, eligible mobile phone manufacturers and EMS companies must have a minimum turnover of Rs 1,000 crore in FY 2025-26 and meet the criteria for an Indian brand.

An Indian brand must be registered or incorporated in India, have its intellectual property and trademarks held in India, have management control with Indian citizens and have more than 51% shareholding held by Indian citizens. It must also have in-house R&D and design capabilities in India.

Additional incentive for domestic sourcing

To accelerate domestic manufacturing and strengthen Atmanirbharta in India's mobile phone ecosystem, the MPMS provides an additional incentive of up to 1.5% for domestic sourcing of key components and sub-assemblies.

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

The additional incentive is aimed at rewarding and encouraging deeper domestic manufacturing and reducing dependence on imported components, thereby strengthening India's position in the global mobile phone supply chain.