Cabinet approves Mobile Phone Manufacturing Scheme (MPMS)

Key Highlights:

• The Union Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore.
• The scheme will run for 5 years, from FY 2026-27 to FY 2030-31.
• It offers incentives ranging from 2.25% to 5% on eligible sales, with additional incentives for domestic sourcing and R&D by Indian brands.
• MPMS aims for a cumulative mobile phone production of Rs 39,00,000 crore and the creation of approximately 60,000 direct jobs.
• This scheme succeeds the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which concluded on March 31, 2026.

Detailed Insights:

• The primary objective of MPMS is to scale up production, deepen domestic value addition, strengthen supply chain resilience, and enhance global competitiveness.
• It also seeks to build Indian brands, achieve technological sovereignty, capture economic value, and foster Indian patents in design and R&D.
• India has emerged as the world's second-largest mobile phone manufacturer by volume, with 99.2% of domestically used mobile phones manufactured within the country.
• Smartphones became India's single largest exported product category in 2025, surpassing traditional exports like diesel fuel and cut diamonds.
• The initiative aligns with the Make in India vision, which has driven a seven-fold growth in electronics manufacturing and an eleven-fold increase in exports since FY 2014-15.

Key Concepts Involved:

• Mobile Phone Manufacturing Scheme (MPMS): A government scheme providing financial incentives to boost domestic mobile phone production, value addition, and exports.
• Production Linked Incentive (PLI) Scheme: A government initiative offering incentives on incremental sales to manufacturers for products made in India.
• Make in India: A government program to encourage companies to manufacture their products in India and incentivize investment.