The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, marking a major step to strengthen India’s position as a global hub for smartphone manufacturing, exports and electronics innovation.
The new scheme aims to scale up mobile phone production, increase domestic value addition, build resilient supply chains, enhance global competitiveness, and promote Indian mobile phone brands with stronger design and research capabilities.
The MPMS will be implemented over five years, from FY 2026-27 to FY 2030-31. Under the scheme, manufacturers will receive incentive support on eligible mobile phone sales at differentiated rates ranging from 2.25 percent to 5 percent.
Companies can also earn an additional incentive of up to 1.5 percent by increasing domestic sourcing of key components and sub-assemblies. To encourage the development of Indian brands, the government will provide an additional 3 percent incentive on eligible sales for product design and research and development.
During the five-year scheme period, India expects cumulative mobile phone production to reach approximately ₹39,00,000 crore, supported by a significant rise in exports. The government estimates that the initiative will create around 60,000 direct jobs, contributing to economic growth, employment generation and expansion of the country’s electronics manufacturing ecosystem.
The MPMS builds on the success of the government’s Make in India initiative, under which India’s electronics manufacturing has expanded 7 times and electronics exports have increased 11 times since FY 2014-15. The electronics sector has become a major source of employment, particularly for young workers from rural areas, with several manufacturing facilities employing more than 5,000 workers at a single location.
Mobile phone manufacturing has emerged as the backbone of India’s electronics industry. India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2 percent of mobile phones used in the country being manufactured domestically. Smartphones also became India’s largest exported product category in 2025, overtaking traditional export leaders such as diesel fuel and cut diamonds, highlighting the country’s growing role in global electronics value chains.
Sohrab Bararia, Partner – Indirect Tax, Grant Thornton Bharat, said: “The ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS) marks the next phase of India’s electronics manufacturing journey. Building on the success of the PLI scheme, MPMS rightly shifts the focus from scale to value creation through deeper localisation, stronger supply chains, and greater investments in design and R&D.
“Beyond strengthening manufacturing competitiveness, the scheme is expected to attract fresh investments, generate around 60,000 direct jobs, boost exports, and reinforce India’s position as a preferred global electronics manufacturing hub,” Sohrab Bararia said.
India’s electronics manufacturing industry has recorded exceptional growth over the past decade, with total production rising from ₹1.90 lakh crore in FY 2014-15 to an estimated ₹13.11 lakh crore in FY 2025-26, representing nearly seven-fold growth.
Electronics exports expanded even faster, increasing from ₹38,263 crore to ₹4.24 lakh crore, an eleven-fold increase, making electronic goods India’s third-largest export category with exports worth USD 47.96 billion in FY 2025-26.
The manufacturing ecosystem has also strengthened significantly, with more than 40 major component manufacturers establishing or expanding operations, supported by a growing network of Tier-2, Tier-3 and Tier-4 suppliers. Domestic value addition has improved from 15 percent to 23 percent, reflecting higher localisation and stronger supply chains.
Mobile phone manufacturing has been the biggest contributor to this transformation. India has evolved from a net importer to the world’s second-largest mobile phone manufacturer and a major export hub. Mobile phone production surged from ₹18,900 crore in FY 2014-15 to ₹6.27 lakh crore in FY 2025-26, a 33-fold increase, while exports jumped from ₹1,566 crore to ₹2.60 lakh crore, recording 165-fold growth.
As a result, mobile phones climbed from the 153rd largest export item in FY 2014-15 to become India’s largest export product in FY 2025-26, highlighting the country’s rising competitiveness in global electronics manufacturing.
BABURAJAN KIZHAKEDATH
