Government Notifies ₹62,500 Cr Mobile Phone Manufacturing Scheme to Boost Global Competitiveness and Deepen Domestic Value Addition

Key Highlights:

• The Mobile Phone Manufacturing Scheme (MPMS) has been notified by the Ministry of Electronics and Information Technology (MeitY) with a budgetary outlay of ₹62,500 crore.
• The scheme aims to enhance global competitiveness, deepen Domestic Value Addition (DVA), and strengthen manufacturing capabilities in mobile phone production.
• It targets two segments: incentivizing mobile phone manufacturing (TS1) and supporting Indian mobile phone brands (TS2).
• The scheme offers differentiated incentives ranging from 2.25% to 5% for TS1, and 5% for Indian brands under TS2, with an additional 3% for Indian design and R&D.
• An additional incentive of up to 1.5% is provided for domestic sourcing of key components and sub-assemblies.
• The MPMS tenure is 5 years, from FY 2026-27 to FY 2030-31.
• It is expected to generate approximately 60,000 direct jobs and achieve a cumulative mobile phone production of ₹39 lakh crore.

Detailed Insights:

• The scheme builds upon the success of the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which ended on March 31, 2026.
• India is currently the world's second-largest mobile phone manufacturer by volume, with 99.2% of phones used domestically being 'Made in India'.
• Smartphones became India's largest exported product category in 2025, surpassing traditional items like diesel fuel and cut diamonds.
• Eligibility for TS1 requires a minimum turnover of ₹10,000 crore in FY 2025-26, with annual sales thresholds thereafter.
• Eligibility for TS2 requires a minimum turnover of ₹1,000 crore in FY 2025-26 and adherence to 'Indian Brand' criteria, including Indian ownership of IP, management control, and shareholding.
• The scheme emphasizes genuine Indian ownership, intellectual property, and design to foster technological sovereignty.

Key Concepts Involved:

• Domestic Value Addition (DVA): The increase in the value of goods or services attributable to domestic production processes.
• Production Linked Incentive (PLI) Scheme: Government schemes offering incentives on incremental sales to manufacturers for products made in India.
• Technological Sovereignty: A nation's ability to develop, control, and use its own technology without reliance on foreign entities.