By Our Business Correspondent
New Delhi: In a major push to India’s electronics manufacturing sector, the Union Cabinet on Wednesday approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, aimed at expanding domestic production, increasing value addition, strengthening supply chains and positioning India as a global hub for smartphone manufacturing and exports.
The scheme, approved at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, will be implemented over a five-year period from FY2026-27 to FY2030-31. It succeeds the Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing, which concluded on March 31, 2026.
According to the government, the MPMS is designed not only to accelerate mobile phone production but also to encourage the development of Indian technology brands, promote indigenous research and development (R&D), and reduce dependence on imported components.
Under the scheme, manufacturers will receive incentive support ranging from 2.25 per cent to 5 per cent on eligible sales of mobile phones produced in India. Companies that increase domestic sourcing of key components and sub-assemblies will be eligible for an additional incentive of up to 1.5 per cent. The government has also introduced a separate 3 per cent incentive on eligible sales for companies investing in product design and research and development to encourage the creation of globally competitive Indian smartphone brands.
The Centre expects the scheme to significantly expand India’s manufacturing capacity. During its five-year tenure, cumulative mobile phone production is projected to reach around ₹39 lakh crore, supported by a substantial rise in exports. The initiative is also expected to create nearly 60,000 direct jobs, providing a boost to employment and strengthening India’s position in the global electronics value chain.
The approval comes at a time when electronics manufacturing has emerged as one of the fastest-growing sectors under the government’s ‘Make in India’ initiative. Official data indicate that since FY2014-15, India’s electronics manufacturing output has increased seven-fold, while electronics exports have grown eleven-fold.
The government highlighted that mobile phone manufacturing has been the cornerstone of this transformation. India is currently the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones sold in the domestic market now being manufactured within the country.
Smartphones have also become India’s largest exported product category in 2025, overtaking traditional export leaders such as refined diesel and cut and polished diamonds. Industry experts say the shift reflects India’s growing integration into global electronics supply chains and the success of policy measures aimed at attracting large-scale manufacturing investments.
Officials said the new MPMS builds upon the gains achieved under the earlier PLI scheme by placing greater emphasis on domestic value addition, component manufacturing, innovation and the creation of Indian intellectual property. The inclusion of dedicated incentives for design, R&D and domestic sourcing is expected to encourage companies to move beyond assembly operations towards higher-value manufacturing.
The government believes the scheme will improve supply chain resilience, reduce import dependence, enhance export competitiveness and support India’s long-term ambition of becoming a leading global electronics manufacturing destination.
The Cabinet’s decision is expected to provide fresh momentum to investments by both global smartphone makers and domestic manufacturers, while strengthening India’s role as an alternative manufacturing base in the evolving global electronics industry.