The Indian Ministry of Electronics and Information Technology has launched the ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS) to promote domestic manufacturing and elevate Indian mobile brands, succeeding the previous large-scale electronics manufacturing incentives.
- Scheme runs from FY27 to FY31 with ₹62,500 Cr budget
- Up to 5% incentives for Indian brands plus R&D support
- Targets ₹39 lakh crore cumulative production and 60,000 direct jobs
What happened
The Ministry of Electronics and Information Technology (MeitY) recently notified the Mobile Phone Manufacturing Scheme (MPMS) with an allocated budget of ₹62,500 crore. This five-year initiative, starting from fiscal year 2027 through 2031, aims to expand domestic mobile phone production and support Indian mobile phone brands by offering differentiated incentives. MPMS replaces the earlier Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing that ended in March 2026.
The scheme offers incentives ranging between 2.25% to 5%, with Indian brands eligible for the highest incentives, including an additional 3% for in-country design and research and development. There are also provisions for extra incentives when companies source specified components locally, provided they meet a 25% local content threshold in manufactured units. The program sets eligibility criteria based on turnover and incremental sales targets for both manufacturers and Indian-branded companies.
Why it matters
India is already the world’s second-largest mobile phone manufacturer by volume with 99.2% of phones used domestically produced in the country. Despite strong assembly capabilities, this scheme marks a significant move to increase value addition within the mobile supply chain and foster indigenous brands with locally held intellectual property and substantial Indian ownership. This shift is expected to elevate India from a manufacturing base focused on assembly to one with a more integrated supply chain and innovative product development.
The government projects the MPMS will drive mobile phone production worth about ₹39 lakh crore over five years and create approximately 60,000 direct jobs. It will also boost exports of smartphones, which have become India’s largest exported product category. Major global players such as Apple, Samsung, Google, and others have established manufacturing hubs in India, but this scheme intends to strengthen homegrown brands and deepen domestic manufacturing capabilities.
What to watch next
Market participants and policymakers will closely monitor the scheme’s implementation to assess how many Indian brands meet the eligibility criteria and successfully leverage the incentives. The government will carefully verify that intellectual property, design, and management control are genuinely Indian-owned. Industry observers will look for the emergence of India’s first robust indigenous mobile brand by mid-2027 as indicated by the Union Electronics and IT Minister Ashwini Vaishnaw.
Further developments in local component manufacturing and innovation ecosystems will be key to realizing the scheme’s objectives. Tracking the growth in local sourcing, incremental sales by participating companies, and export volumes will provide insights into the scheme’s effectiveness in transforming India’s mobile manufacturing landscape into a more competitive and internationally recognized sector.