The Ministry of Electronics and Information Technology (MeitY) has announced the Mobile Phone Manufacturing Scheme (MPMS), with a budgetary outlay of Rs 62,500 crore, aiming to increase global competitiveness by enhancing scale, deepening the mobile manufacturing supply chain through higher Domestic Value Addition (DVA), and strengthening domestic manufacturing capabilities. The scheme will also support Indian mobile phone companies to accomplish technological sovereignty, capture greater economic value, and encourage Indian patents in design and R&D, along with employment generation.
In response, Ashwini Vaishnaw, Union Minister for Electronics and Information Technology, stated that the Mobile Phone Manufacturing Scheme will provide a significant impetus to the development of Indian-owned mobile brands, intellectual property and design.
He also emphasised the importance of genuine Indian ownership, along with formulation of the design, intellectual property and brand as Indian-owned with capability to compete with the best products in the respective market segment. He added that the Government is set to undertake a meticulous evaluation to ensure Indian-owned intellectual property, while non-fiscal and other support measures will be developed in consultation with the industry.
How will the scheme work and help?
At present, India is the 2nd largest mobile phone manufacturer in the world by volume, accounting for 99.2 per cent of the production of mobile phones which are being used in India. It has emerged as India’s single largest exported product category in 2025, along with surpassing traditional leading export items.
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The announced scheme will run for five years, covering FY 2026-27 through FY 2030-31, with TS2 applicants eligible for a one-year gestation period. TS1 offers a differentiated incentive ranging from 2.25 per cent to 5 per cent, while TS2 provides a 5 per cent incentive for Indian Brands, plus an extra 3 per cent for Indian design and R&D, along with non-fiscal support. Both target segments can also avail an additional incentive of up to 1.5 per cent for sourcing key components and sub-assemblies domestically.
Eligible applicants include mobile phone manufacturers and India-registered Electronics Manufacturing Services (EMS) providers, with sales and incentives calculated on a brand-wise basis. It also provides an additional incentive of up to 1.5 per cent for the domestic sourcing of key components and sub-assemblies, which is designed to reward and reinforce genuine, deep-rooted domestic manufacturing.
Reacting to it, Nitish Gopalani, CEO, Fonada, said, “India’s Rs 62,500-crore Mobile Phone Manufacturing Scheme comes at a pivotal moment, as smartphones become increasingly AI-centric. Cloud LLMs, voice AI, real-time translation and on-device models are reshaping everyday use, while AI quality, latency and privacy are becoming genuine purchase and upgrade criteria. As these capabilities reach mid-range devices, they could broaden replacement demand.”
“What makes MPMS strategically important is its focus beyond manufacturing scale and domestic sourcing: in its Indian-brand track, it adds a 3 per cent incentive for Indian design and R&D, while requiring IP and trademarks to be held in India. That signals that scale in assembly is no longer the end goal. If India pairs its manufacturing base with Indian-language AI, local inference and domestic product design, it can move further up the value chain, owning more of the intelligence, IP and experience inside the device,” Gopalani added.
So, the expected outcome of the government is to make mobile phone production under the scheme reach nearly Rs 39 lakh crore during its tenure, accompanied by a substantial increase in exports. The government also confirmed that MPMS is likely to generate 60,000 direct jobs, contributing to economic growth, employment generation, and bolstering India’s position as a global electronics manufacturing hub.
