Cabinet approves Mobile Phone Manufacturing Scheme (MPMS)

• The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore on July 15.

What is the significance of this scheme?

• Mobile phone manufacturing has emerged as the anchor of India’s electronics manufacturing ecosystem. 

• India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used in India being manufactured domestically.

• 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. 

• Mobile phones now constitute a major share of India’s electronics production and exports and are playing a critical role in strengthening India’s position in global value chains.

• The Production Linked Incentive Scheme for Large Scale Electronics Manufacturing has played a transformative role in establishing India as a global hub for mobile manufacturing and exports. The tenure of the PLI scheme ended on March 31, 2026.

Highlights of the scheme:

• The government launched the scheme to further scale up production, deepen domestic value addition, strengthen supply chain resilience and  enhance global competitiveness. 

• MPMS scheme also aims at building Indian brands to achieve technological sovereignty, capture large economic value and create Indian patents in design and R&D.

• The scheme tenure shall be five years from FY 2026-27 to FY 2030-31.

• The scheme provides incentive support on eligible sales for manufacturing of mobile phones in India at differentiated rates ranging from 2.25 per cent to 5 per cent. 

• It also provides additional incentive of up to 1.5 per cent linked to domestic sourcing of key components/sub-assemblies. 

Expected outcomes:

• During the scheme tenure, the cumulative mobile phone production in the country is expected to reach approximately Rs 39 lakh crore with significant increase in exports of mobile phones. 

• The scheme is also expected to generate around 60,000 direct jobs thereby contributing to economic growth, employment generation and strengthening India’s position in global electronics manufacturing hub.