Cabinet unveils ₹1.9 lakh-crore high-tech push: Clears Mobile PLI 2.0 & Semicon 2.0 to drive local design and chip sovereignty
The Union Cabinet approved two linked schemes with a combined outlay of nearly ₹1.9 lakh crore: the Mobile Phone Manufacturing Scheme (MPMS), commonly referred to as Mobile PLI 2.0, at ₹62,500 crore, and Semicon 2.0 at ₹1,27,500 crore
MPMS is designed to move India's mobile manufacturing base from assembly-led production toward local design and deeper component-level value addition
The scheme targets significantly higher domestic value addition than the original Production Linked Incentive (PLI) scheme for mobile manufacturing (2020)
The government projects the scheme will drive cumulative mobile phone production worth about ₹39 lakh crore over its tenure and generate roughly 60,000 direct jobs
Production Linked Incentive (PLI) Scheme — Evolution from PLI 1.0 to Mobile PLI 2.0
The PLI scheme was first launched in April 2020 for mobile manufacturing and specified electronic components, along with pharmaceutical APIs and medical devices, before being extended to 14 sectors including automobiles, textiles, specialty steel, solar PV modules, advanced chemistry cell batteries, and drones. The mechanism ties fiscal incentives to incremental production/sales over a base year rather than to capital investment alone, distinguishing it from earlier capital-subsidy schemes. MPMS (Mobile PLI 2.0) narrows this broad framework back to mobile manufacturing specifically, but shifts the incentive design toward design-led and component-level manufacturing rather than final assembly.
Key Details
- PLI 1.0 (2020) covered mobile manufacturing and specified electronic components as one of its first three sectors; the scheme was later extended across 14 sectors with a combined incentive outlay of about ₹1.97 lakh crore
- PLI 1.0 for mobiles helped shift India from a net importer to a major assembler/exporter of smartphones, but value addition remained concentrated in final assembly rather than components
- MPMS (2026) outlay: ₹62,500 crore, explicitly targeting local design and deeper component value addition (e.g., printed circuit boards, camera modules, semiconductors) rather than assembly alone
- Nodal ministry: Ministry of Electronics and Information Technology (MeitY)
MPMS represents a second-generation PLI design — a shift in policy emphasis from "manufacture in India" (assembly) to "design and make in India" (value addition and chip-level sovereignty).
Semicon 2.0 and the Six-Pillar Semiconductor Ecosystem
Semicon 2.0, approved on the same day, extends the India Semiconductor Mission (launched December 2021 with a ₹76,000 crore outlay under MeitY) into a larger second phase built around six strategic pillars: chip design, semiconductor equipment and materials, fabrication, advanced packaging and testing, R&D, and talent development. Pairing it with MPMS is intended to create a domestic demand pull (mobile manufacturers needing chips) alongside domestic chip supply.
Key Details
- Semicon 2.0 outlay: ₹1,27,500 crore, expected to draw about ₹4 lakh crore in investment and generate ₹2 lakh crore in production during the scheme period
- Under the first phase, 12 semiconductor fabrication/packaging projects were approved with over ₹1.64 lakh crore in cumulative investment; India's first indigenously fabricated chip output is targeted for 2028
- The Design Linked Incentive (DLI) scheme (₹1,000 crore) separately supports chip-design startups with EDA tool access and design-cost reimbursement
Linking Mobile PLI 2.0 with Semicon 2.0 is intended to vertically integrate India's electronics value chain — from chip design and fabrication to device assembly — rather than treating mobile manufacturing and semiconductors as separate policy tracks.
Atmanirbhar Bharat and Industrial Policy Instruments
Both schemes sit within the broader Atmanirbhar Bharat (self-reliant India) industrial policy framework, which relies on production/incentive-linked schemes rather than tariff protection alone to build domestic manufacturing capacity in strategic sectors.
Key Details
- Atmanirbhar Bharat Abhiyan was announced in May 2020 as a response to the COVID-19 disruption of global supply chains, later evolving into a standing industrial policy approach
- PLI-style incentives (output-linked) are distinguished from earlier import-substitution tools such as customs duty protection or Special Economic Zone (SEZ) tax holidays
- Electronics and semiconductors are treated as a strategic sector given import dependence and defence/telecom security implications
MPMS and Semicon 2.0 continue the post-2020 shift in India's industrial policy toolkit from protectionist tariffs toward output-linked fiscal incentives targeting strategic, high-value manufacturing.
- Combined outlay of MPMS and Semicon 2.0: ~₹1.9 lakh crore (roughly USD 22 billion)
- MPMS (Mobile PLI 2.0) outlay: ₹62,500 crore; projected cumulative production ~₹39 lakh crore; ~60,000 direct jobs expected
- Semicon 2.0 outlay: ₹1,27,500 crore; projected investment ~₹4 lakh crore; projected production ~₹2 lakh crore
- Original PLI scheme (April 2020) expanded to 14 sectors with a combined incentive outlay of ~₹1.97 lakh crore
- India Semiconductor Mission 1.0 (December 2021) outlay: ₹76,000 crore; first domestic fab output targeted for 2028