The government has announced a major push to expand mobile phone manufacturing in India.
The Mobile Phone Manufacturing Scheme (MPMS) 2.0 has been launched with a total budget of Rs 62,500 crore.
The scheme aims to increase mobile production, encourage more components to be made in India and help Indian smartphone brands compete in global markets.
The scheme will run for five years, from FY 2026-27 to FY 2030-31. The first performance year will be FY 2026-27.
Electronics and IT Minister Ashwini Vaishnaw said the scheme will help expand India’s mobile manufacturing ecosystem while supporting Indian companies looking to grow internationally.
Two Parts of the New Mobile Manufacturing Scheme
MPMS 2.0 has been divided into two segments.
The first focuses on companies manufacturing mobile phones in India.
The second is aimed at helping Indian mobile phone brands expand.
Under the manufacturing segment, companies registered in India, including electronics manufacturing services (EMS) companies, can qualify if they had a minimum turnover of Rs 10,000 crore in FY 2025-26.
Eligible companies will receive production-linked incentives on mobile phones manufactured in India.
The incentive will range from 2.25% to 5% over the five-year period, depending on the category and financial year.
More Incentives for Using Indian-Made Components
One of the biggest focuses of the scheme is increasing the use of locally manufactured components.
Companies can receive an additional incentive of up to 1.5% for sourcing key components and sub-assemblies from India.
These components include display modules, camera modules, phone enclosures, batteries and USB cables.
To qualify for this additional incentive, companies must use locally made components in at least 25% of the total mobile phones sold during a financial year.
The government expects this move to strengthen India’s domestic supply chain and reduce dependence on imported components.
Special Push for Indian Smartphone Brands
The second segment is specifically designed to support Indian mobile phone brands.
Companies, including EMS firms, need to have a minimum turnover of Rs 1,000 crore in FY 2025-26 to qualify.
The Indian brand must be registered or incorporated in India, while its intellectual property and trademark must also be owned in India.
The scheme also requires management control to remain with Indian citizens and more than 51% Indian citizen shareholding in the company claiming the Indian brand.
Companies must also have their own research and development and design capabilities in India.
Eligible Indian brands will receive an incentive of 5% on eligible sales. They can get another 3% incentive for Indian product design and research and development.
The government will also provide non-financial support to help Indian brands expand globally.
Scheme Expected to Create 60,000 Jobs
The government expects MPMS 2.0 to give a major boost to production and employment.
The scheme is expected to create around 60,000 direct jobs.
The government is targeting mobile phone production worth around Rs 39 lakh crore under the scheme.
It also aims to increase India’s existing mobile production capacity from around Rs 22 lakh crore to more than Rs 40 lakh crore.
The programme will also focus on the wider electronics ecosystem, including smartphones, displays and batteries.
The push for battery manufacturing could also benefit other sectors, including products such as drones.
Industry Welcomes the New Scheme
Industry leaders have welcomed MPMS 2.0, saying it could provide greater confidence for companies planning long-term investments in India.
Pankaj Mohindroo, Chairman of ICEA, said the scheme represents the next stage of India’s mobile manufacturing journey and provides policy continuity for the industry.
Ashok Gupta, Executive Chairman of Optiemus Infracom, said the scheme could help the electronics sector move beyond large-scale assembly towards deeper and higher-value manufacturing.
The government is also exploring technical collaborations to help Indian mobile brands become stronger global competitors.
Overall, MPMS 2.0 is aimed at taking India’s mobile manufacturing industry to the next level — from simply assembling phones to building a stronger domestic ecosystem for components, design, research and globally competitive Indian brands.
