Govt okays new mobile phone manufacturing scheme, targets Rs 39 lakh crore cumulative production

NEW DELHI: The Union Cabinet on Wednesday approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore and targeting a cumulative mobile phone production in the country of around Rs 39 lakh crore during the scheme period.

Announcing the decision, Union Electronics and Information Technology Minister Ashwini Vaishnaw on Wednesday said the new scheme aims to further scale up mobile phone manufacturing, deepen domestic value addition, strengthen supply chain resilience and enhance India’s global competitiveness.

According to the government, the scheme will be implemented for a period of five years from FY 2026-27 to FY 2030-31. During the scheme period, the government expects cumulative mobile phone production to reach approximately Rs 39 lakh crore, along with a significant increase in mobile phone exports.

#WATCH | On the Cabinet approving the Mobile Phone Manufacturing Scheme (MPMS), Union Minister Ashwini Vaishnaw says, “An outlay of Rs 62,500 crore has been allocated. The last decade has witnessed a massive transformation in electronics manufacturing: production has increased… pic.twitter.com/6CWcCllW1n

— ANI (@ANI) July 15, 2026

The scheme will provide incentive support on eligible sales for manufacturing mobile phones in India at differentiated rates ranging from 2.25 per cent to 5 per cent. It also provides an additional incentive of up to 1.5 per cent linked to domestic sourcing of key components and sub-assemblies.

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To encourage Indian companies to develop their own products, the scheme also offers an additional 3 per cent incentive on eligible sales for product design and research and development (R&D), with the objective of building Indian brands, achieving technological sovereignty and creating Indian patents in design and R&D.

Addressing the media, Vaishnaw said, “Today’s decision is the Mobile Phone Manufacturing Scheme (MPMS). The scheme will have an outlay of Rs 62,500 crore. You are all aware that the electronics manufacturing sector has undergone a massive transformation in recent years.”

He said that compared to 2014, electronics manufacturing in India has increased seven-fold, while exports have grown eleven-fold. “India, which was once a mobile phone importer, has now become a net exporter and the world’s second-largest manufacturer of mobile phones. The mobile phone industry is unique because it aims to bring the computing power of a large computer centre or data centre into a small handheld device,” the minister said.

The government also highlighted that the scheme is expected to generate around 60,000 direct jobs, contributing to economic growth, employment generation and strengthening India’s position as a global electronics manufacturing hub.

According to the government, mobile phone manufacturing has emerged as the key driver of India’s electronics manufacturing ecosystem. India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used in the country being manufactured 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 India’s electronics production and exports and are playing an important role in strengthening the country’s position in global value chains.

The government said the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) played a transformative role in making India a global hub for mobile manufacturing and exports. The tenure of the PLI-LSEM scheme ended on March 31, 2026, and the newly approved MPMS aims to build on that progress by further expanding domestic manufacturing and value addition. (ANI)