Key Details
India’s first decade of electronics policy built manufacturing scale. The Mobile Phone Manufacturing Scheme (MPMS) is designed to build the next layer of competitiveness through localisation, component manufacturing, design and R&D.
Focus Area | Key Provision | Why It Matters |
|---|---|---|
New manufacturing strategy | MPMS approved with an outlay of ₹62,500 crore for FY2026–27 to FY2030–31 | Replaces the Production Linked Incentive Scheme (PLI-LSEM) as India’s next-generation mobile manufacturing policy |
Production incentives | Incentives of 2.25%–5% on eligible sales | Sustains manufacturing growth and export competitiveness |
Domestic value addition | Additional incentive of up to 1.5% for sourcing key components and sub-assemblies domestically | Encourages localisation and strengthens supply-chain resilience |
Indian brands & innovation | Additional 3% incentive for design and R&D | Promotes indigenous intellectual property, product development and Indian mobile brands |
Expected outcomes | Mobile phone production projected at ₹39 lakh crore with 60,000 direct jobs | Supports exports, employment and deeper participation in global value chains |
Manufacturing base | India is now the world’s second-largest mobile phone manufacturer, with 99.2% of phones sold domestically manufactured in India | Provides the foundation for moving from manufacturing scale to higher value addition |
India’s Mobile Manufacturing Strategy Enters Its Next Phase
The Union Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore over five years, replacing the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which concluded in March 2026.
While the earlier PLI scheme helped establish India as a major global manufacturing base, MPMS shifts policy attention towards the next stage of industrial development—building deeper domestic value addition through component manufacturing, indigenous design, research and development (R&D) and stronger Indian mobile brands.
The Scheme Rewards Localisation and Innovation
The new incentive structure goes beyond rewarding production volumes.
Manufacturers will continue to receive incentives ranging from 2.25% to 5% on eligible sales, while additional incentives are linked to domestic sourcing of key components and sub-assemblies, encouraging firms to localise supply chains rather than rely on imported inputs.
Companies investing in product design and research and development (R&D) for Indian mobile brands will receive a further 3% incentive, signalling a policy shift towards creating domestic intellectual property (IP), technology capabilities and globally competitive Indian brands alongside manufacturing.
Building on a Decade of Manufacturing Growth
The Government notes that electronics manufacturing has increased seven-fold and electronics exports have grown eleven-fold since FY2014–15 under the Make in India initiative.
India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2% of mobile phones used domestically manufactured within the country. Smartphones also became India’s largest export product category in 2025, reflecting the country’s growing integration into global electronics value chains.
MPMS seeks to build on these achievements by ensuring that a greater share of design, components, technology development and value creation takes place within India rather than focusing primarily on final assembly.
What is Domestic Value Addition in Manufacturing?
Domestic value addition is the share of a product’s total value created within a country through component manufacturing, assembly, design, research and development (R&D), engineering and other high-value activities. Countries with low value addition mainly assemble imported components, whereas those with high value addition manufacture more components domestically, develop indigenous technologies, own intellectual property (IP) and retain a larger share of the economic value generated.
Higher domestic value addition strengthens supply-chain resilience, creates high-skilled jobs, reduces import dependence and enhances competitiveness in global value chains.
Policy Relevance
Signals a strategic shift from expanding manufacturing capacity towards building a deeper domestic electronics manufacturing ecosystem.
Encourages higher domestic value addition by linking incentives to local sourcing of components and sub-assemblies rather than production alone.
Creates stronger incentives for indigenous design, research and development (R&D) and Indian mobile technology brands, supporting domestic intellectual property (IP) creation.
Strengthens India’s position in global electronics value chains by combining manufacturing scale with greater technological capability.
Supports long-term supply-chain resilience by reducing dependence on imported components while expanding exports, employment and industrial competitiveness.
Follow the Full News Here: Cabinet approves Mobile Phone Manufacturing Scheme (MPMS)