Cabinet Approves Mobile Phone Manufacturing Scheme (MPMS): Key Features, Incentives, Benefits and Expected Impact

Union Cabinet chaired under the leadership of Honorable Prime Minister Narendra Modi has approved the Mobile Phone Manufacturing Scheme (MPMS). The plan has a financial backing of ₹62,500crore, intending to boost the local manufacturing, increase value addition, enhance supply chain efficiency, promote Indian brands and positioning India as a global leader in mobile manufacturing. The development comes right after the completion of the successful Production Linked Incentive (PLI) Plan for Large Scale Electronics Manufacturing, indicating the government’s effort on the Make in India initiative.

What is the Mobile Phone Manufacturing Scheme (MPMS)?

The Mobile Phone Manufacturing Scheme (MPMS) is a newly launched scheme by the central government in India.

This scheme has been approved by the cabinet of ministers on 15th July, 2026. Under this scheme, the government aims at developing the mobile phone manufacturing sector through performance linked rewards.

The purpose of MPMS is to help India achieve advanced mobile phone manufacturing skills and capabilities in the field of making mobile phone components, product development, R&D, and brand creation.

The scheme is aimed at making India operational in achieving results of the project over five years from 2026-27.

The Introduction of MPMS

India has evolved to become the second-largest mobile phone producer in the world in terms of share, as 99% of mobile phones manufactured in India are sold within the country.

Although a rapid growth has been seen in the mobile phone manufacturing in the past ten years, improving value addition and technology capabilities remains one of the agenda items.

The MPMS objective was to,

• Enhance mobile phone manufacturing capabilities
• Boost local production of major components
• Lower reliance on imported goods
• Create a resilient supply chain
• Support Indian investor trusting in innovation
• Facilitate indigenous design and research
• Boost the position of the India in the electronics manufacturing industry.

The introduction of the scheme was also coherent with the long-term objective of the making India as a trustworthy destination for manufacturing worldwide.

Key Features of Mobile Phone Manufacturing Scheme (MPMS)

The most recently sanctioned scheme introduces several incentives that are designed to promote tech development and creativity in manufacturing processes.

Budgeting

• Total amounts of budget: ₹62,500 crore

Scheme Duration

• Five years
• From the fiscal year 2026-2027 to fiscal year 2030-2031

Incentives for the Eligible Sales

Manufacturers will be reimbursed according to the following,

• 2.25% to 5% on qualified sales of mobile phones which are built in India.
• Incentive rates are determined by the category and performance standards.

Additional Incentives for Domestic Sourcing

In order to stimulate local production, companies may receive the,

• Up to 1.5% more incentives connected to local sourcing of the specific components of production.
• This is due to the intention to create a more developed supply chain in electronics and decrease dependence on imports.
  Fundraising from Indian Industries
• Thus, in order to increase self-sufficiency in tech progress, the government may give additional funding for companies that spend money on product design and R&D initiatives.
• Some Indian brands might gain access to an additional 3% of the reimbursement for qualified sales.

How MPMS Builds on the Success of the PLI Scheme

The implementation of the PLI scheme has led to several significant achievements

Numerous global smartphone manufacturers set up operations in India.

Exports of mobile phones reached an all-time high level.

India was able to establish itself in various global electronics supply chains.

Significant manufacturing facilities were brought into operation which created a large number of jobs, especially for population in rural parts of India.

The new scheme called MPMS will enhance the results achieved by the PLI scheme.