India’s ₹62,500 Crore Mobile Bet: Can It Push Local Value Addition To 40%?

The Union government has rolled out the five-year Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore. The initiative, which began on April 1, 2026, succeeds the prior production-linked incentive programme for large-scale electronics manufacturing.

The scheme targets Rs 39 lakh crore in cumulative production and Rs 15 lakh crore in exports over its five-year tenure. Officials project the policy will create 60,000 direct jobs across device assembly lines and allied supply chains while deepening the domestic component ecosystem.

Rules for Existing Makers

Established global manufacturers and electronics manufacturing services companies must have a minimum turnover of Rs 10,000 crore in FY26 to qualify for incentives.

Participating companies must meet escalating incremental sales thresholds to claim benefits.

These targets scale up from Rs 5,000 crore in FY27 to Rs 25,000 crore in FY31. Authorities will calculate this metric against a moving baseline of 15 per cent above the domestic sales recorded in the preceding year.

The manufacturing incentive features a dual-rate structure. One portion of qualifying sales will earn a 2.75 per cent reward in FY27 and FY28, gradually decreasing to 2.25 per cent by FY31.

The remaining eligible sales attract a 5 per cent incentive initially, dropping to 4 per cent by the final year. New brands entering this segment must first achieve annual domestic sales of Rs 10,000 crore.

Boosting Indian Brands

The government has carved out a dedicated track to boost homegrown mobile manufacturers. Indian brands require a minimum turnover of Rs 1,000 crore in FY26 to enter the scheme, with no minimum threshold sales requirement.

Firms must meet strict ownership and operational criteria to access these benefits.

The brand must be incorporated locally, maintain its trademarks and intellectual property within the country and ensure Indian citizens hold management control along with more than 51 per cent equity. Companies must also operate in-house design and research facilities in India.

Qualifying domestic players will secure a base incentive of 5 per cent. They can earn an additional 1.5 per cent for domestic sourcing and a further 3 per cent bonus for Indian design and R&D.

MeitY Secretary S Krishnan outlined the strategic intent. "For Indian brands, to make them global, we are trying to look at technological sovereignty and strategic autonomy, capture greater economic value, and also build our own products and intellectual property," Krishnan said.

Sourcing and Value Addition

The scheme splits the 1.5 per cent domestic-sourcing bonus across specific supply chain elements. Manufacturers can earn 0.3 per cent each for display and camera modules, 0.5 per cent for enclosures and 0.2 per cent each for batteries and USB cables.

Companies must ensure these specific parts are localised in at least a quarter of all mobile units sold over the fiscal year to claim this payout.

Domestic value addition across the local mobile manufacturing sector has grown from about 15 per cent under the previous scheme to roughly 23 per cent today. MeitY is targeting an increase to between 35 per cent and 40 per cent through the new framework.