Cabinet Approves ₹62,500 Crore Mobile Phone Manufacturing Scheme to Boost Domestic Production

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore to strengthen India’s mobile phone manufacturing ecosystem, increase domestic value addition and enhance the country’s global competitiveness.

The scheme, which will be implemented over five years from FY 2026-27 to FY 2030-31, aims to scale up mobile phone production, build resilient supply chains and encourage the development of Indian technology brands through greater investment in design and research.

Under the scheme, manufacturers will receive incentives on eligible sales ranging from 2.25 per cent to 5 per cent, depending on specified criteria. Companies sourcing key components and sub-assemblies domestically will be eligible for an additional incentive of up to 1.5 per cent, while Indian brands investing in product design and research and development (R&D) can receive an extra 3 per cent incentive on eligible sales.

According to the government, the scheme is intended not only to expand manufacturing capacity but also to promote technological self-reliance by encouraging the creation of indigenous intellectual property, patents and globally competitive Indian mobile phone brands.

The government expects cumulative mobile phone production to reach approximately ₹39 lakh crore during the scheme period, accompanied by a significant increase in exports. The initiative is also projected to generate around 60,000 direct jobs, contributing to employment growth and strengthening India’s position as a global electronics manufacturing hub.

The approval comes amid rapid growth in India’s electronics manufacturing sector under the Make in India initiative. According to the government, electronics manufacturing has expanded seven-fold since 2014-15, while exports have increased eleven-fold during the same period. The sector has also emerged as a major source of employment, particularly for young workers, with several manufacturing facilities employing more than 5,000 people at a single location.

Mobile phone manufacturing has been a key driver of this growth. India is currently the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used in the country now being produced domestically.

The government also noted that smartphones became India’s largest exported product category in 2025, surpassing traditional export items such as diesel fuel and cut diamonds. Mobile phones now account for a significant share of the country’s electronics production and exports, strengthening India’s integration into global value chains.

The new scheme succeeds the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which concluded on March 31, 2026. The government said the PLI programme played a transformative role in establishing India as a global hub for mobile phone manufacturing and exports, and MPMS is expected to build on that momentum by driving the next phase of growth in the sector.

Source: PIB