The Centre has notified a Rs 62,500-crore ‘Mobile Phone Manufacturing Scheme (MPMS)‘ aimed at taking India’s mobile-phone production to about Rs 39 lakh crore over five years, raising exports to around Rs 15 lakh crore, and creating an estimated 60,000 direct jobs.
The scheme shifts policy focus beyond simply assembling handsets in India, as it offers incentives for locally made components, Indian-owned intellectual property, domestic design and research, and globally competitive Indian mobile brands.
Electronics and IT Minister Ashwini Vaishnaw said India could see its first strong, genuinely Indian-owned smartphone brands emerge within 10–14 months, potentially by mid-2027. He also indicated that Apple could broaden its Indian manufacturing beyond iPhones, while India seeks a larger role in global electronics supply chains.
Rs 62,500 crore scheme aims for Rs 39 lakh crore production
MPMS has a budgetary outlay of around Rs 62,500 crore and will operate for five financial years—from 2026-27 to 2030-31. It replaces the Production-Linked Incentive scheme for large-scale electronics manufacturing, whose tenure ended on March 31, 2026.
The government expects the programme to help nearly double the cumulative value of mobile-phone production during its tenure. The target is approximately Rs 39 lakh crore, compared with roughly Rs 20 lakh crore under the earlier phase of mobile-manufacturing incentives.
The plan also seeks to double the value of mobile-phone exports to around Rs 15 lakh crore, from about Rs 7.5 lakh crore achieved under the previous scheme. The main idea is to ensure that a greater share of the value of every phone—components, design, engineering, software-linked intellectual property, and manufacturing—stays within India.
Two target segments: Large manufacturers and Indian brands
The scheme has two target segments. The first is for large-scale handset manufacturers and electronics manufacturing services, or EMS, companies. The second is for Indian mobile-phone brands with Indian ownership, domestic intellectual property, and in-house design and research capability.
- Target Segment 1 (TS1) supports large mobile-phone manufacturers and EMS firms registered in India. Incentives will be 2.75% in 2027 and 2028, 2.5% in 2029 and 2030, and 2.25% in 2031.
- Target Segment 2 (TS2) supports eligible Indian-owned mobile brands. It offers a 5% incentive on eligible sales, plus an additional 3% for Indian design and R&D.
All eligible applicants can also receive an additional incentive of up to 1.5% for domestic sourcing of key components and sub-assemblies. The component-linked incentives range from 0.2% to 0.5% and cover locally made items such as display modules, camera modules, enclosures, batteries, Universal Serial Bus (USB) cables, and connectors.
Additional Incentive for sourcing key components in India
The additional local-sourcing incentive is designed to deepen domestic value addition rather than reward final assembly alone. To claim it, the relevant components must be localised for at least 25% of the total mobile phones manufactured by the applicant in a financial year.
This is important because India has already become a major mobile-phone manufacturing location, but a significant share of high-value components has historically been imported. By rewarding local procurement of displays, batteries, camera modules, and other sub-assemblies, the government aims to build a stronger domestic supplier base.
Vaishnaw said, “India has already crossed the 25–28% domestic value-addition range, while the highest value addition built by mature manufacturing economies over decades is generally around 38–40%.” He said MPMS is structured to improve India’s position further during its five-year tenure.
Strict rules for Indian-owned brands and domestic IP
The most distinctive part of the scheme is TS2, which is aimed at developing Indian-owned brands, patents, product design and research capability. Eligible Indian brands will receive a 5% incentive on qualifying sales and can claim a further 3% incentive for Indian design and R&D. They will also receive non-financial support from the government. However, the government has set strict conditions to prevent firms from presenting imported or copied designs as Indian technology.
To qualify as an Indian brand, a company must:
- Be registered or incorporated in India.
- Hold its intellectual property and trademark in India.
- Have management control held by Indian citizens.
- Have more than 51% Indian shareholding.
- Maintain in-house design and R&D capabilities in India.
- Have at least Rs 1,000 crore turnover in 2025-26.
Vaishnaw said the government would scrutinise the ownership of the design and intellectual property before approving companies for benefits. “The design has to be your own design. It cannot just be a copycat. They have to come up with the design and prove that the IP is their own,” he said
He said three potential Indian players were working towards products that could arrive in about 10–14 months. The government has not publicly named the companies, citing market sensitivity.
High thresholds for large firms
For TS1, mobile-phone makers and contract manufacturers must be registered in India and have reported at least Rs 10,000 crore turnover in 2025-26. Existing brands must also meet annual incremental sales thresholds of Rs 5,000 crore above their 2026 sales base.
The threshold sales requirement rises over the scheme period:
- 2027: Rs 5,000 crore above 2026 sales.
- 2028: Rs 10,000 crore above 2026 sales.
- 2029: Rs 15,000 crore above 2026 sales.
- 2030: Rs 20,000 crore above 2026 sales.
- 2031: Rs 25,000 crore above 2026 sales.
A new brand becomes eligible under the manufacturing segment only after achieving total annual Indian sales of Rs 10,000 crore. In contrast, Indian brands under TS2 do not face a minimum threshold-sales requirement, though they must meet the ownership, IP and R&D criteria. Applicants under the Indian-brand segment may receive a one-year gestation period to establish operations and meet the scheme’s development requirements.
Apple and Google expected to expand Indian manufacturing
Vaishnaw indicated that Apple’s India presence could expand beyond iPhone manufacturing. Asked whether Apple may begin making additional products such as iPads or Macs in India, he replied “yes,” signalling that the government expects a wider Apple hardware footprint over time.
The minister also said the government expects Google to shift a substantial portion of its export-oriented device production from China to India. Together, such moves could help India secure a larger role not only in the domestic handset market but also in global production and export networks.
India is already the world’s second-largest mobile-phone manufacturer by volume, according to the government. It says 99.2% of mobile phones used in India are now made in India, while smartphones became the country’s largest export product category in 2025, moving ahead of products such as diesel and cut diamonds.
From assembly hub to product and IP ownership
The earlier PLI programme helped India build manufacturing scale, attract global smartphone producers and create large electronics-production facilities. The government says electronics manufacturing has grown seven-fold and exports eleven-fold since 2014-15, with several factories employing thousands of workers, including young people from smaller towns and villages.
But MPMS is intended to address the next challenge as it’s moving from assembly-led growth to ownership of products, components, technology, and brands. Electronics and IT Secretary S Krishnan described this as an effort to create technological sovereignty and strategic autonomy.
“For Indian brands, to make them global, we are trying to look at technological sovereignty, strategic autonomy, capture greater economic value, and also to build our own products and intellectual property,” Krishnan said.
The Ministry of Electronics and Information Technology is also expected to issue detailed implementation guidelines separately. A project management agency will administer the scheme, after which applications and selection of eligible companies are expected to begin.
