The Union Cabinet on Wednesday approved a ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS) aimed at scaling up domestic mobile phone production, deepening local value addition and strengthening India's position as a global electronics manufacturing hub.
Chaired by Prime Minister Narendra Modi, the Cabinet cleared the scheme with a five-year tenure from FY2026-27 to FY2030-31.
The scheme succeeds the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which ended on March 31, 2026.
Incentives for manufacturing, local sourcing
Under the scheme, companies manufacturing mobile phones in India will receive production-linked incentives ranging from 2.25% to 5% on eligible sales.
Manufacturers can also claim an additional incentive of up to 1.5% for sourcing major components and sub-assemblies domestically, encouraging deeper localisation of the supply chain.
To promote Indian smartphone brands, the government will provide an additional 3% incentive on eligible sales linked to product design and research and development (R&D).
According to the government, the scheme aims to boost production, increase domestic value addition, strengthen supply chain resilience, enhance global competitiveness and build Indian brands capable of developing indigenous technologies and patents.
₹39 lakh crore production target
The Centre expects the scheme to generate cumulative mobile phone production worth around ₹39 lakh crore during its five-year tenure.
It is also projected to create around 60,000 direct jobs, contributing to employment generation and economic growth.
"Smartphones have emerged as the single largest exported product category from India in 2025, surpassing traditional leading export items such as diesel fuel and cut diamonds," the government said in a statement.
It added that mobile phones now account for a significant share of India's electronics production and exports and play a critical role in integrating the country into global value chains.
India's mobile manufacturing growth
The government said India's electronics manufacturing sector has expanded rapidly under the Make in India initiative, with electronics production growing sevenfold and exports increasing elevenfold since FY2014-15.
India is now the world's second-largest mobile phone manufacturer by volume, with 99.2% of mobile phones used in the country being manufactured domestically.
According to the Ministry of Electronics and Information Technology (MeitY), mobile phone production has increased from ₹18,900 crore in FY2014-15 to ₹6.27 lakh crore in FY2025-26, while exports have surged from ₹1,566 crore to ₹2.60 lakh crore during the same period.
The government also noted that mobile phones have risen from being India's 153rd largest export item in FY2014-15 to becoming the country's largest export product in FY2025-26, underscoring India's growing competitiveness in global electronics manufacturing.
