Cabinet Approves ₹62,500 Crore Mobile Phone Manufacturing Scheme

Under the new programme, manufacturers will receive incentives ranging from 2.25 per cent to 5 per cent on eligible sales of mobile phones produced in India.

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore, marking a major push to expand India's mobile manufacturing industry and strengthen its position as a global electronics production hub.

The five-year scheme, which will run from 2026-27 to 2030-31, is designed to increase domestic value addition, make supply chains more resilient and improve the global competitiveness of mobile phones manufactured in India. It also places strong emphasis on developing Indian brands, encouraging innovation and supporting research and development to create home-grown technologies and intellectual property.

Incentives linked to manufacturing, local sourcing and innovation

Under the new programme, manufacturers will receive incentives ranging from 2.25 per cent to 5 per cent on eligible sales of mobile phones produced in India. Companies that increase domestic sourcing of key components and sub-assemblies can receive an additional incentive of up to 1.5 per cent.

The scheme also introduces a separate 3 per cent incentive for Indian brands investing in product design and research and development, encouraging companies to move beyond assembly and build stronger capabilities in technology and innovation.

The Government expects the initiative to deepen local manufacturing, reduce dependence on imported components and create a more competitive electronics ecosystem capable of serving both domestic and international markets.

Production expected to touch ₹39 lakh crore

During the five years, cumulative mobile phone production is projected to reach around ₹39 lakh crore, supported by a significant rise in exports. The scheme is also expected to create nearly 60,000 direct jobs, adding to employment opportunities in one of India's fastest-growing manufacturing sectors.

India has already emerged as the world's second-largest mobile phone manufacturer by volume, with 99.2 per cent of the mobile phones used in the country now produced domestically. Smartphones also became India's largest exported product category in 2025, overtaking traditional export leaders such as diesel fuel and cut diamonds.

The new scheme builds on the gains made under the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing, whose tenure concluded in March 2026, and seeks to accelerate India's journey towards becoming a leading global centre for electronics manufacturing and innovation.