Cabinet Clears ₹62,500-Cr Mobile Manufacturing Scheme; Targets ₹39 Lakh Cr Output

The Union Cabinet on Wednesday approved the Mobile Phone Manufacturing Scheme (MPMS) with an outlay of ₹62,500 crore to strengthen India's electronics manufacturing ecosystem and expand the country's smartphone production and exports.

The new scheme will run for five years, from FY27 to FY31, and succeeds the Production Linked Incentive (PLI) scheme for mobile phones launched in 2020. It aims to encourage domestic manufacturing, increase local value addition and support India's ambition to become a global electronics manufacturing hub.

The government expects the scheme to help achieve cumulative mobile phone production worth around ₹39 lakh crore, exports of ₹15 lakh crore and create about 60,000 direct jobs over its tenure.

Focus on Manufacturing, Exports and Local Sourcing

Under the scheme, manufacturers will receive incentives on eligible mobile phone sales at rates ranging from 2.25% to 5%.

The policy also offers an additional incentive of up to 1.5% for companies that increase domestic sourcing of key components and sub-assemblies, with the aim of strengthening India's local supply chain.

Indian brands will receive an additional 3% incentive linked to product design and research and development (R&D), as the government seeks to encourage the creation of globally competitive domestic smartphone brands and boost innovation.

Builds on Success of Earlier PLI Scheme

Electronics and Information Technology Minister Ashwini Vaishnaw said India's mobile manufacturing ecosystem has transformed significantly over the past decade, with smartphones emerging as the country's largest export category.

He said the previous mobile phone PLI scheme exceeded several of its targets. Around ₹19,090 crore was disbursed as incentives, while the government collected about ₹25,000 crore in direct taxes and ₹3 lakh crore in GST from the sector.

According to the minister, the earlier scheme helped generate mobile phone production worth over ₹11.6 lakh crore, with exports crossing ₹6.4 lakh crore. Investment under the programme also exceeded its original target, laying the foundation for the new scheme.

Scheme Notification Expected Soon

The government said the new Mobile Phone Manufacturing Scheme will be notified within the next 20 days.

Apart from boosting production and exports, the policy is expected to promote technological self-reliance by encouraging patent creation, innovation and higher investment in research and development.

The scheme is also expected to support the next phase of growth in India's electronics sector by deepening local manufacturing capabilities and strengthening the country's position in global supply chains.