Union Road Transport and Highways Minister Nitin Gadkari announced on Wednesday, 15 July 2026 that 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, to be implemented over five years from FY 2026–27 to FY 2030–31.

Context

Gadkari shared the cabinet decision on X, stating that the scheme aims 'to scale up mobile phone manufacturing, deepen domestic value addition, strengthen supply chain resilience, and enhance India's global competitiveness.' The scheme also targets fostering Indian brands, promoting technological sovereignty, and encouraging innovation through 'indigenous design, R&D, and patent creation.'

Performance-linked incentives on eligible sales will be offered at rates ranging from 2.25% to 5%, rewarding manufacturers based on output and domestic value addition benchmarks.

Policy Backdrop

The MPMS builds on India's earlier Production Linked Incentive (PLI) scheme for mobile manufacturing, approved in 2020 with an outlay of approximately ₹41,000 crore. That scheme attracted investment from global assembly units and helped India sharply increase mobile phone production volumes and exports under the Atmanirbhar Bharat framework.

The new scheme substantially raises the financial commitment — by over ₹21,000 crore — and shifts the emphasis beyond assembly toward deeper supply chain integration, indigenous design, and intellectual property creation. Where the 2020 PLI primarily targeted scale, the MPMS explicitly sets technological sovereignty as a policy goal.

India has rolled out sector-specific incentive schemes across electronics, pharmaceuticals, textiles, and other industries since 2020, seeking to reduce import dependence and position the country as a global manufacturing hub. The mobile phone sector has been a flagship of this effort, with production value rising significantly over the past five years.

Stakeholders and Impact

The scheme's primary beneficiaries will be mobile phone manufacturers and electronics component suppliers operating in India. By linking incentives to eligible sales, the MPMS is designed to reward firms that invest in domestic production capacity and move up the value chain from assembly to component and design-level manufacturing.

The push for Indian brands and indigenous R&D signals an intent to nurture homegrown champions alongside established global players. Patent creation is explicitly cited as an objective, suggesting the government wants India to move from a manufacturing destination to an innovation origin in the mobile technology space.

For consumers and the broader economy, a deeper domestic supply chain could reduce the country's dependence on imported components — particularly from China — and improve resilience against global supply disruptions of the kind seen during the COVID-19 pandemic.

What's Next

Implementation details, including roll-out guidelines and beneficiary selection criteria, are expected to be finalised by the Ministry of Electronics and Information Technology (MeitY), which oversees the electronics manufacturing policy portfolio. Annual reviews of value-addition and export targets are anticipated once the scheme's first year, FY 2026–27, gets under way.

The scheme's success will hinge on whether manufacturers deepen localisation beyond final assembly and whether Indian brands can gain meaningful market share — both domestically and in export markets — by FY 2030–31.