Cabinet Clears ₹62,500 Crore Mobile Phone Manufacturing Scheme to Position India as a Global Smartphone Powerhouse

In a landmark decision aimed at accelerating India’s transformation into a global electronics manufacturing leader, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Mobile Phone Manufacturing Scheme (MPMS) with a financial outlay of ₹62,500 crore.

The ambitious programme will be implemented over a five-year period from FY 2026–27 to FY 2030–31 and is designed to significantly expand India’s mobile phone manufacturing capacity, increase domestic value addition, strengthen supply chain resilience, promote indigenous innovation, and enhance the country’s competitiveness in the global electronics market.

A Strategic Investment in India’s Manufacturing Future

The approval of MPMS signals the government’s determination to move India beyond being primarily an assembly destination and towards becoming a comprehensive manufacturing and innovation hub for mobile devices.

With smartphones now serving as essential tools for communication, education, digital payments, healthcare, e-commerce, and governance, building a robust domestic manufacturing ecosystem has become an important national priority.

The scheme seeks to establish India as one of the world’s preferred destinations for producing next-generation mobile devices while creating long-term industrial capabilities.

Five-Year Roadmap for Expansion

The programme will run from 2026–27 through 2030–31, providing manufacturers with a stable policy framework for long-term investments.

A multi-year implementation period allows companies to:

• Expand manufacturing facilities.
• Invest in advanced production technologies.
• Develop local supplier networks.
• Increase research capabilities.
• Train skilled workers.
• Scale production for both domestic and export markets.

The long-term approach is intended to provide policy certainty that encourages sustained industrial growth.

Performance-Linked Incentives Reward Growth

A defining feature of MPMS is its performance-linked incentive (PLI) mechanism.

Manufacturers meeting the programme’s eligibility criteria will receive incentives based on incremental eligible sales. Depending on performance, incentives will range between 2.25 percent and 5 percent.

Rather than offering fixed subsidies, the programme rewards companies that successfully expand production, improve efficiency, and increase sales, ensuring that public investment is directly linked to measurable manufacturing outcomes.

Increasing Domestic Value Addition

One of the government’s major objectives is to significantly raise the percentage of mobile phone components manufactured within India.

At present, many sophisticated electronic components continue to be imported. Under MPMS, manufacturers will be encouraged to source and produce more components domestically, including:

• Printed circuit board assemblies.
• Battery systems.
• Camera modules.
• Display components.
• Connectors.
• Mechanical parts.
• Charging systems.
• Precision electronic assemblies.

Greater local manufacturing can reduce import dependence while strengthening India’s industrial ecosystem.

Building a Stronger Electronics Supply Chain

Global supply chain disruptions in recent years demonstrated the importance of diversified manufacturing networks.

The Mobile Phone Manufacturing Scheme seeks to create a resilient domestic supply chain capable of supporting uninterrupted production while reducing exposure to external risks.

A stronger supplier ecosystem can improve production efficiency, shorten delivery timelines, reduce logistics costs, and attract additional investments into India’s electronics sector.

Supporting Indian Technology Brands

While global companies have established significant manufacturing operations in India, MPMS also places strong emphasis on developing Indian brands.

The scheme aims to help domestic companies strengthen their manufacturing capabilities, improve product quality, invest in innovation, and compete more effectively in international markets.

Support for Indian enterprises could contribute to the emergence of globally recognized technology brands designed and developed within the country.

Encouraging Indigenous Research and Innovation

Beyond manufacturing, MPMS seeks to promote technological self-reliance by encouraging:

• Indigenous product design.
• Advanced research and development.
• Intellectual property generation.
• Patent creation.
• Electronics engineering innovation.
• Product testing and certification.

Investments in research can enable Indian companies to create proprietary technologies rather than relying solely on imported designs.

Employment and Skill Development

Expansion of mobile phone manufacturing is expected to create substantial employment opportunities across multiple industries.

The programme is likely to generate demand for:

• Electronics engineers.
• Manufacturing specialists.
• Industrial designers.
• Production technicians.
• Quality assurance professionals.
• Supply chain managers.
• Software developers.
• Research scientists.

Educational institutions and skill development centres may also benefit from growing demand for specialized training in electronics manufacturing.

Strengthening India’s Export Potential

India has steadily increased exports of smartphones over recent years, emerging as an important manufacturing base for international markets.

The new scheme seeks to build on this momentum by improving manufacturing scale, increasing product quality, and expanding export competitiveness.

Higher production capacity could strengthen India’s position within global electronics supply chains while contributing to export growth and foreign exchange earnings.

Advancing Technological Sovereignty

One of the programme’s most significant goals is promoting technological sovereignty.

Developing domestic capabilities in product design, advanced manufacturing, intellectual property, and innovation can reduce dependence on external technologies while strengthening India’s strategic autonomy in the rapidly evolving digital economy.

This objective aligns with broader national initiatives aimed at strengthening domestic capabilities in semiconductors, electronics, telecommunications, and advanced manufacturing.

Looking Ahead

The approval of the ₹62,500 crore Mobile Phone Manufacturing Scheme represents a major milestone in India’s industrial development strategy. By combining performance-based incentives with long-term investments in manufacturing, research, innovation, and domestic value addition, the programme aims to create a world-class mobile phone manufacturing ecosystem.

If successfully implemented, MPMS has the potential to position India among the world’s leading centres for smartphone production, foster globally competitive Indian technology companies, create thousands of high-skilled jobs, strengthen export performance, and contribute significantly to the country’s vision of becoming a global leader in advanced electronics manufacturing.