The Union Cabinet has officially approved the Mobile Phone Manufacturing Scheme (MPMS), backed by a massive budgetary outlay of ₹62,500 crore. This strategic policy marks the next phase in India’s journey toward becoming a global hub for advanced electronics manufacturing. Succeeding the highly successful Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) which concluded on March 31, 2026, the MPMS shifts the focus from sheer assembly scale to deep domestic value addition and technological sovereignty.
What is the Mobile Phone Manufacturing Scheme (MPMS)?
The MPMS is a comprehensive 5-year policy framework running from FY 2026-27 to FY 2030-31. It is designed to scale up production capacity, fortify supply chain resilience, and aggressively promote the creation of homegrown Indian electronics brands.
Strategic Objectives of MPMS
- Deepen Domestic Value Addition (DVA): Moving beyond basic assembly to incentivize the local manufacturing of critical components.
- Achieve Technological Sovereignty: Encouraging the creation of Indian patents in design and Research & Development (R&D).
- Enhance Global Competitiveness: Cementing India’s position in complex global value chains.
Breakdown of Financial Incentives Under MPMS
To attract sustained investments and offset initial cost disabilities for domestic players, the MPMS introduces a highly targeted, multi-tiered incentive structure:
1. Core Manufacturing Incentives
- The scheme provides direct incentive support on eligible sales for mobile phones manufactured within India.
- These incentives are offered at differentiated rates ranging from 2.25% to 5%.
2. Supply Chain & Domestic Sourcing Boost
- To build a robust local component ecosystem, the MPMS offers an additional incentive of up to 1.5%.
- This specific boost is strictly linked to the domestic sourcing of key components and sub-assemblies, encouraging manufacturers to build deep local supply networks.
3. Indian Brand & R&D Premium
- In a major push to establish global Indian smartphone brands, the government is offering an extra 3% incentive on Eligible Sales.
- This premium is specifically allocated for companies undertaking the design and R&D of the product entirely in-house, capturing larger economic value for the domestic market.
Expected Economic Impact and Outcomes
The Make in India initiative has already propelled the electronics manufacturing sector to grow 7 times and exports to grow 11 times since FY 2014-15. The MPMS is projected to exponentially accelerate this momentum.
Production & Export Targets
- During its 5-year tenure, the MPMS is expected to drive cumulative mobile phone production in India to a staggering ₹39,00,000 crore.
- The scheme anticipates a massive surge in mobile phone exports, building on the milestone achieved in 2025 when smartphones became India’s single largest exported product category, surpassing traditional leaders like diesel fuel and cut diamonds.
Employment Generation
- The electronics manufacturing sector has emerged as a major employer, with some individual plants employing over 5,000 workers.
- The MPMS is projected to generate an additional 60,000 direct jobs, directly contributing to sustained economic growth and large-scale employment generation.
Transitioning from PLI-LSEM to MPMS
India is currently the world’s second-largest mobile phone manufacturer by volume, with 99.2% of mobile phones used domestically being manufactured within the country. The previous PLI-LSEM played a transformative role in this achievement. The new MPMS builds on this foundation by providing the industry with long-term policy predictability. It ensures that the next wave of manufacturing goes beyond scale, establishing true manufacturing depth and anchoring India’s leadership in the next generation of global electronics.
Align Your Manufacturing Strategy with MPMS 2026
Consult MCS ExpertsOfficial Notification Download
For corporate compliance teams, supply chain strategists, and manufacturers looking to evaluate eligibility criteria, the official PIB press release and upcoming gazette notifications contain the foundational technical parameters.
