1. Introduction

The five-year scheme, covering FY 2026-27 to FY 2030-31, seeks to strengthen India’s position in the global mobile phone manufacturing ecosystem by increasing production, deepening domestic value addition (DVA), strengthening supply chains and improving global competitiveness.

The scheme also places greater emphasis on building Indian-owned mobile phone brands, developing domestic intellectual property, and promoting design and research and development (R&D) capabilities in India.

2. Origin and Intent

The MPMS has been introduced as a follow-on to the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), whose tenure ended on 31 March 2026. The earlier PLI scheme played an important role in expanding mobile phone manufacturing and exports from India. The new scheme is intended to maintain this momentum while addressing the next stage of development—greater localisation and the creation of globally competitive Indian brands. 

India is currently the world’s second-largest mobile phone manufacturer by volume, while 99.2% of mobile phones used in the country are manufactured domestically. Smartphones also became India’s largest exported product category in 2025, surpassing traditional leading export items such as diesel fuel and cut diamonds. 

The government’s objective is therefore shifting beyond manufacturing scale towards capturing a larger share of the value generated through domestic components, technology, intellectual property, design and brands.

3. Key Amendments

The MPMS has two target segments. 

Target Segment 1 (TS1) focuses on expanding mobile phone manufacturing, including through Electronics Manufacturing Services (EMS) companies. It provides differentiated incentives ranging from 2.25% to 5% on eligible sales.

Target Segment 2 (TS2) focuses on supporting Indian mobile phone brands. Eligible Indian brands will receive a 5% incentive, with an additional 3% incentive for Indian design and R&D. The scheme also provides non-fiscal support to Indian brands

A further incentive of up to 1.5% is available to both segments for domestic sourcing of key components and sub-assemblies. To qualify, such components must be localised for at least 25% of the total mobile phone units manufactured in a financial year. 

4. Impact

A major focus of the MPMS is the development of genuinely Indian mobile phone brands. Under TS2, applicants must be registered or incorporated in India, hold their intellectual property and trademarks in India, have management control with Indian citizens, and have more than 51% shareholding held by Indian citizens. They must also have in-house design and R&D capabilities in India. 

The eligibility threshold under TS1 requires mobile phone manufacturers, including EMS companies, to have a minimum turnover of ₹10,000 crore in FY 2025-26. For TS2, applicants require a minimum turnover of ₹1,000 crore in FY 2025-26 and must satisfy the prescribed Indian-brand criteria. 

By linking incentives to domestic sourcing, the scheme is also expected to encourage deeper localisation of components and sub-assemblies. This could help strengthen India’s electronics supply chain and reduce dependence on imported inputs.

5. Conclusion

The MPMS represents the next phase of India’s mobile manufacturing strategy. While the earlier PLI helped establish India as a major manufacturing and export base, the new scheme places greater emphasis on domestic value addition, component localisation, intellectual property, design, R&D and Indian-owned brands.

During the scheme’s tenure, cumulative mobile phone production in India is expected to reach approximately ₹39 lakh crore, alongside a significant increase in exports. The scheme is also expected to generate around 60,000 direct jobs. If implemented effectively, MPMS could help India move from being primarily a large-scale manufacturing base towards becoming a stronger centre for mobile technology, innovation and globally competitive Indian brands.