The Union Cabinet on Wednesday approved a Mobile Phone Manufacturing Scheme (MPMS) with an outlay of Rs 62,500 crore for a period of five years.
The scheme will be notified in 20 days. MPMS succeeds the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing, which ended in March 2026.
Union Minister of Electronics and Information Technology, Ashwani Vaishnaw in a cabinet briefing said the scheme will disburse incentives based on domestic sourcing, and design and R&D by Indian brands.
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 further promote Indian smartphone brands, the government will provide an additional 3% incentive on eligible sales linked to product design and research and development.
The scheme will also have incentives for export of smartphones, the minister said.
The Centre expects the scheme to generate cumulative mobile phone production worth around Rs 39 lakh crore during its five-year tenure, as against Rs 22 lakh crore production achieved under the previous production-linked incentive scheme, Vaishnaw said.
The scheme also has a target to reach Rs 15 lakh crore of mobile phone exports, which has become one of the top exported products from India. In the previous scheme, India exported smartphones worth Rs 7.5 lakh crore.
It is also projected to create around 60,000 direct jobs in mobile manufacturing and other sectors, the minister said.
Vaishnaw said the aim of the scheme is to launch an Indian brand that can serve the global market. The scheme will also help promote technological sovereignty and build intellectual properties through patent creation, R&D and innovation, he added.
Vaishnaw said under the previous scheme, Rs 19,090 crore was disbursed as incentives while the government collected Rs 25,000 crore in direct tax and Rs 3 lakh crore in GST from the smartphone industry. Investment under the previous PLI scheme was Rs 20,587 crore, exceeding the target by three times. Smartphone production was Rs 11,61,581 crore during the tenure, exceeding the target by 142%. Exports also exceeded target by 132%, achieving Rs 6,43,323 crore during the scheme’s tenure, Vaishnaw said.
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