Mobile Phone Manufacturing Scheme (MPMS)
Why in News?
The Mobile Phone Manufacturing Scheme (MPMS) is in the news because the Union Cabinet, chaired by Prime Minister Narendra Modi, officially approved the scheme on July 15, 2026, with a massive budgetary allocation of ₹62,500 crore.
Objectives
- This major policy rollout serves as the direct successor to the highly successful Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which concluded its term on March 31, 2026.
- Value Addition: Shifting India's position from basic handset assembly to deep domestic value-added manufacturing.
- Brand Sovereignty: Helping build native Indian smartphone brands to establish technological sovereignty and capture massive global economic value.
- Supply Resilience: Strengthening domestic supply chain ecosystem resilience against global tariff exposure and geopolitical disruptions.
- Patent Creation: Incentivizing Indian companies to create indigenous patents through intensive Research and Development (R&D) and product design.
Key Features and Financial Incentives
- Scheme Tenure: Operational for a strict duration of 5 years, running from Financial Year 2026-27 to 2030-31.
- Base Incentives: Offers production-linked incentive support on eligible sales ranging between 2.25% and 5%.
- Component Sourcing Boost: Grants an additional incentive of up to 1.5% for companies that source key components and sub-assemblies locally within India.
- R&D Advantage: Provides an extra 3% incentive on eligible sales to domestic brands focusing heavily on product design and R&D.
Expected Outcomes & Targets
- Massive Production: Projects a cumulative mobile phone production value of roughly ₹39,00,000 crore over the 5-year timeline.
- Job Creation: Anticipated to generate over 60,000 direct employment opportunities in electronic manufacturing and allied components industries.
- Export Push: Significantly expanding smartphone exports, building on its status as India's single largest exported product category in 2025.
Present Context & Progress
- Global Stand: India stands firmly as the world's second-largest mobile phone manufacturer by volume.
- Local Assembly Success: Nearly 99.2% of mobile phones used across India are now assembled domestically.
- Value Share: The previous PLI version successfully pushed localized value addition to 24%, and the MPMS aims to drastically narrow the gap with China's 38% rate.
