Govt launches 62,500 Cr ‘Mobile Phone Manufacturing Scheme’, aims strong Indian brand by 2027
The Ministry of Electronics and Information Technology (MeitY) notified the Mobile Phone Manufacturing Scheme (MPMS), a five-year scheme running from FY2026-27 to FY2030-31 with a budgetary outlay of Rs 62,500 crore.
The scheme offers a two-track incentive structure: Track 1 is open to manufacturers with a minimum turnover of Rs 10,000 crore in FY2025-26, while Track 2 is reserved for Indian-owned mobile phone brands (majority Indian shareholding, trademark/IP ownership in India, in-country design and R&D) with no minimum sales threshold, selected through an inter-ministerial committee chaired by the MeitY Secretary.
Base incentives range from 2.25% to 5% of eligible sales value, with an additional bonus of up to 1.5% for domestic sourcing of key components (displays, camera modules, enclosures, batteries, USB cables) and up to 3% additional for design and research conducted within India under the Indian-brand track.
The scheme targets nearly doubling cumulative mobile phone production to about Rs 39-40 lakh crore over its tenure and is expected to generate roughly 60,000 direct jobs.
The government indicated it is engaging with global manufacturers to broaden India-based production beyond flagship devices, and separately supporting three domestic companies expected to develop into standalone smartphone brands over the next 10-14 months.
Production Linked Incentive (PLI) Scheme for Mobile Manufacturing (2020)
The PLI Scheme for Large Scale Electronics Manufacturing was launched in April 2020 as part of the government's Atmanirbhar Bharat push, offering cash incentives on incremental sales of domestically manufactured mobile phones over a base year. It was the first scheme to use a sales-linked (rather than capital-linked) subsidy design for electronics manufacturing in India, and its results are the direct baseline against which the new MPMS is being compared.
Key Details
- Outlay: Rs 40,995 crore; incentive rate 4-6% on incremental sales of eligible mobile phones over the base year (FY2019-20)
- Goal: raise domestic value addition in mobile phones from 15-20% to 35-40%, and in electronic components to 45-50%
- More than 30 companies met investment, production, and export benchmarks under the scheme, and the electronics manufacturing services sector crossed Rs 1.25 lakh crore in revenue by FY24
- The scheme ran for five years and was structured around incremental (not absolute) sales growth, unlike the MPMS's tiered base-incentive design
The MPMS is positioned as the direct successor to the 2020 PLI scheme, replacing an incremental-sales incentive with a differentiated base-incentive-plus-bonus structure, and for the first time creating a dedicated track to nurture India-owned smartphone brands rather than only contract manufacturing for foreign brands.
National Policy on Electronics (NPE), 2019
The NPE 2019, approved by the Union Cabinet, is the overarching policy framework for India's Electronics System Design and Manufacturing (ESDM) sector, setting long-term targets for turnover, mobile handset production, and the creation of globally competitive Indian electronics brands — of which schemes like the PLI and MPMS are implementing instruments.
Key Details
- Targeted ESDM sector turnover of USD 400 billion (about Rs 26 lakh crore) by 2025, including production of 1 billion mobile handsets (USD 190 billion), of which 600 million handsets (USD 110 billion) were meant for export
- Envisaged special incentive packages for high-investment "mega projects" such as semiconductor fabs and display fabrication units
- Explicitly identified the creation of globally recognized Indian electronics brands as a policy goal, distinct from merely attracting contract manufacturing
- Superseded the earlier National Policy on Electronics 2012, widening the ambit from components to the full ESDM value chain
The MPMS's Track 2 — reserved exclusively for Indian-owned brands with in-country design and R&D — operationalizes the NPE 2019's stated goal of building globally competitive Indian electronics brands, moving policy focus beyond assembly-stage manufacturing.
India Semiconductor Mission and the "Design-to-Brand" Value Chain
Government incentive schemes in electronics have progressively moved up the value chain: from assembly (PLI 2020) to component sourcing (MPMS's localisation bonus) to chip design and fabrication (India Semiconductor Mission, approved 2021) and now to brand ownership and R&D (MPMS Track 2). This reflects a broader Prelims-relevant sequencing of "Make in India" policy instruments across electronics.
Key Details
- India Semiconductor Mission (ISM) was approved in December 2021 with an outlay of Rs 76,000 crore to build a semiconductor and display manufacturing ecosystem
- The Design Linked Incentive (DLI) Scheme, under ISM, supports domestic semiconductor chip design startups with financial and infrastructure support
- MeitY is the common nodal ministry across PLI (2020), ISM (2021), and MPMS (2026), reflecting a single-ministry policy architecture for electronics value-chain development
The MPMS's R&D and IP-ownership criteria for Indian brands mirror the same "move up the value chain" logic that underlies the semiconductor mission's push from assembly to design, testing this policy pattern as a recurring current-affairs theme across electronics schemes.
- MPMS outlay: Rs 62,500 crore; duration FY2026-27 to FY2030-31; nodal ministry MeitY
- Base incentive: 2.25% to 5% of eligible sales; component-sourcing bonus: up to 1.5%; Indian-brand R&D bonus: up to 3%
- Track 1 eligibility: minimum Rs 10,000 crore turnover in FY2025-26; Track 2 (Indian brands): no minimum sales threshold, majority Indian ownership and IP required
- Projected cumulative production during scheme period: approximately Rs 39-40 lakh crore; projected direct jobs: approximately 60,000
- Predecessor PLI Scheme (2020) outlay: Rs 40,995 crore; incentive 4-6% on incremental sales; domestic value addition target raised from 15-20% to 35-40%
- NPE 2019 target: USD 400 billion ESDM turnover by 2025, including 1 billion mobile handsets produced domestically