Mobile Phone Manufacturing Scheme (MPMS): Boosting India’s Electronics Manufacturing Ecosystem

The Ministry of Electronics and Information Technology (MeitY) has notified the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore. The scheme aims to strengthen India’s position as a global mobile phone manufacturing hub by increasing production scale, improving Domestic Value Addition (DVA), deepening the domestic supply chain, and encouraging Indian-owned mobile brands.

The MPMS also seeks to promote technological sovereignty, Indian intellectual property, design and research and development (R&D), while creating new employment opportunities in the electronics manufacturing sector.

What Is the Mobile Phone Manufacturing Scheme?

The Mobile Phone Manufacturing Scheme has been introduced to sustain the growth achieved by India’s electronics manufacturing industry and take mobile phone production to the next level.

The scheme focuses on two major areas:

Incentivising mobile phone manufacturing Supporting Indian mobile phone brands

The scheme will remain operational for five years, from FY 2026-27 to FY 2030-31. Applicants under the second target segment may also receive a gestation period of one year.

Union Minister for Electronics and Information Technology Shri Ashwini Vaishnaw highlighted the importance of Indian ownership of brands, designs and intellectual property. Under the scheme, Indian brands are expected to demonstrate genuine Indian ownership and the ability to compete with leading products in their respective market segments.

Background of India's Mobile Manufacturing Growth

India’s electronics manufacturing industry has expanded significantly under the Government’s Make in India initiative. Since FY 2014-15, electronics manufacturing has grown seven-fold, while electronics exports have increased eleven-fold.

Mobile phone manufacturing has been one of the key drivers of this growth. Today, India is the world’s second-largest mobile phone manufacturer by volume, and around 99.2% of mobile phones used in India are Made in India.

Smartphones also became India’s largest exported product category in 2025, surpassing traditionally important export products such as diesel fuel and cut diamonds.

The earlier Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) played an important role in establishing India as a major destination for mobile phone manufacturing and exports. With the PLI-LSEM tenure ending on 31 March 2026, the MPMS has been introduced to maintain this momentum and further strengthen domestic manufacturing.

Key Features of MPMS

The Mobile Phone Manufacturing Scheme has two target segments:

Target Segment 1 (TS1)

TS1 focuses on Incentivising mobile phone manufacturing, including manufacturing carried out by Electronics Manufacturing Services (EMS) providers registered in India.

The incentive under TS1 ranges from 2.25% to 5%, depending on the applicable criteria under the scheme.

Target Segment 2 (TS2)

TS2 is designed specifically to support Indian mobile phone brands.

Eligible Indian brands can receive an incentive of 5%, along with an additional 3% incentive for Indian design and R&D. The scheme will also provide non-fiscal support to Indian brands.

An additional incentive of up to 1.5% can be available for domestic sourcing of eligible key components and sub-assemblies under both target segments.

Eligibility Criteria

For TS1, eligible applicants include mobile phone manufacturers and EMS companies registered in India with a minimum turnover of ₹10,000 crore in FY 2025-26.

Existing brands must achieve an annual sales threshold of ₹5,000 crore over and above their FY 2025-26 sales. A new brand can become eligible after reaching total annual sales of ₹10,000 crore in India and must subsequently meet the required year-on-year sales threshold.

For TS2, applicants must have a minimum turnover of ₹1,000 crore in FY 2025-26 and satisfy the requirements applicable to an Indian brand.

These requirements include:

Registration or incorporation in India Intellectual property and trademarks held in India Management control with Indian citizens More than 51% shareholding held by Indian citizens In-house design and R&D capabilities in India

Additional Incentive for Domestic Sourcing

A major objective of the MPMS is to increase domestic value addition and strengthen the local supply chain.

The scheme provides an additional incentive of up to 1.5% for domestic sourcing of key components and sub-assemblies. However, the relevant components must be localised for at least 25% of the total mobile phone units manufactured during a financial year.

This provision is intended to encourage deeper localisation and reduce dependence on imported components.

Business and Compliance Requirements for Manufacturers

Companies planning to establish or expand mobile phone manufacturing operations in India need to comply with various business and regulatory requirements. Depending on their structure and operations, businesses may need company registration and sector-specific approvals before commencing operations.

Manufacturers should also evaluate applicable manufacturing license requirements and ensure that their products and manufacturing processes comply with relevant regulatory standards.

Product packaging and declarations are another important area of compliance. Businesses dealing with packaged electronics may need to consider requirements relating to legal metrology, including mandatory declarations on product and package labels wherever applicable.

Therefore, businesses seeking to benefit from India's growing electronics manufacturing ecosystem should plan their corporate, manufacturing and product compliance requirements alongside their investment and production strategy.

Expected Impact of MPMS

The Mobile Phone Manufacturing Scheme is expected to significantly increase India’s mobile phone production and exports.

During the five-year tenure of the scheme, cumulative mobile phone production is expected to reach approximately ₹39 lakh crore. The scheme is also expected to generate around 60,000 direct jobs.

Beyond production and employment, MPMS is designed to encourage Indian ownership of mobile brands, intellectual property, product design and R&D. This could help Indian companies capture a larger share of the economic value generated by the global electronics industry.

Conclusion

The Mobile Phone Manufacturing Scheme (MPMS) represents the next phase of India’s strategy to build a globally competitive electronics manufacturing ecosystem. With a ₹62,500 crore budgetary outlay, differentiated incentives and additional support for domestic sourcing, Indian brands, design and R&D, the scheme aims to deepen localisation while encouraging Indian companies to compete in international markets.

By combining manufacturing incentives with a focus on domestic value addition and Indian intellectual property, MPMS can further strengthen India’s position in global mobile phone supply chains and contribute to employment, exports and long-term technological capability.