Mobile Phone Manufacturing Scheme (MPMS)

Ten years ago, India barely made its own phones. Today, 99.2% of the phones Indians use are made at home. A fresh ₹62,500 crore scheme wants to push even further.

A Scheme With Tiered Incentives

The Union Cabinet approved the Mobile Phone Manufacturing Scheme (MPMS) on 15 July 2026, chaired by PM Narendra Modi.

• MPMS carries a total outlay of ₹62,500 crore.
• The scheme runs for 5 years, from FY 2026-27 to FY 2030-31.
• MPMS succeeds the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), whose tenure ended on 31 March 2026.

How the Incentives Are Structured

MPMS gives incentives on eligible sales for making mobile phones in India, at differentiated rates from 2.25% to 5%.

Two bonus layers sit on top of that base rate.

• Up to 1.5% more for sourcing key components and sub-assemblies domestically.
• 3% more for design and R&D behind Indian brands.

How Far India Has Come

Over the scheme’s 5-year tenure, cumulative mobile phone production in India is expected to reach roughly ₹39,00,000 crore. MPMS is expected to generate about 60,000 direct jobs.

• India is now the world’s second-largest mobile phone manufacturer by volume.
• As of 2026, 99.2% of mobile phones used in India are made domestically.

From Assembly to Exports

Smartphones became India’s single largest exported product category in 2025. They overtook older leading exports like diesel fuel and cut diamonds.

• Since FY 2014-15, under the Make in India push, electronics manufacturing has grown 7 times over.
• Electronics exports have grown even faster: 11 times over in the same period.

Beyond Assembly: Building Ownership

MPMS sits within India’s broader electronics manufacturing push. That push has grown into a major national employer, well beyond just mobile phones.

• Unlike its predecessor PLI Scheme, MPMS builds in a dedicated bonus for Indian-brand design and R&D. This shifts the reward from assembly volume alone toward genuine domestic ownership.
• The layered incentive structure, a base rate plus bonuses for local sourcing and homegrown brands, is a deliberate design choice. It nudges manufacturers up the value chain, not just toward higher output.
• Mobile phone manufacturing already transformed once. India went from import-dependent to 99.2% domestic. MPMS now tries to repeat that at a deeper level, in components and brands, not just final assembly.

The Assembly vs Value Trap

A few details here trip up exam-takers. Watch for these three traps.

• Common Trap: A high domestic assembly figure, like 99.2%, is sometimes wrongly read as proof that most of a phone’s actual value is created in India. Assembly alone often captures only a modest share of a device’s total value. Components, chips, and design still carry much of it, which is exactly why MPMS adds separate bonuses for local sourcing and Indian-brand R&D.
• Scheme-Confusion Trap: MPMS is often confused with two other schemes. One is the ACC PLI battery scheme. The other is the broader, sector-agnostic PLI Scheme for electronics. MPMS is specifically the successor to PLI-LSEM. It targets mobile phone assembly and brands, not batteries.
• Whose Article: Questions on the broader, sector-agnostic PLI Scheme belong to a separate article. Questions on this specific mobile-phone successor scheme belong here.