Cabinet clears Rs 62,500-crore Mobile Phone Manufacturing Scheme to boost domestic R&D

The Union Cabinet has approved the ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS) for five years. Succeeding the previous PLI scheme, the initiative aims to drive ₹39 lakh crore in production and create 60,000 direct jobs

New Delhi: The Union Cabinet — chaired by Prime Minister Narendra Modi — on Wednesday approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore to scale up domestic production, boost exports and strengthen India’s position as a global electronics manufacturing hub.

The scheme — which will run for five years from FY2026-27 to FY2030-31 — aims to strengthen supply chain resilience, enhance global competitiveness and encourage the development of Indian mobile phone brands through investments in design and research and development (R&D).

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Under the MPMS, manufacturers will receive incentive support on eligible sales of mobile phones produced in India at differentiated rates ranging from 2.25 per cent to 5 per cent.

Moreover, the scheme provides an additional incentive of up to 1.5 per cent linked to domestic sourcing of key components and sub-assemblies.

To promote indigenous brands, manufacturers will be eligible for an additional 3 per cent incentive on eligible sales for product design and R&D.

According to the Cabinet, the scheme is expected to result in cumulative mobile phone production worth around Rs 39 lakh crore during its tenure, while significantly increasing exports of handsets from the country.

The MPMS is also projected to generate around 60,000 direct jobs, contributing to employment generation and economic growth.

The Cabinet noted that the initiative builds on the success of the government’s Make in India programme, under which electronics manufacturing has grown seven-fold and exports have increased 11-fold since FY2014-15.

India is now the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used in the country being manufactured domestically.

The government also highlighted that smartphones emerged as India’s single largest exported product category in 2025, surpassing traditional export leaders such as diesel fuel and cut diamonds.

Additionally, the new scheme succeeds the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) — whose tenure ended on March 31.

The government said the PLI scheme played a transformative role in establishing India as a global hub for mobile phone manufacturing and exports.