Prime Minister Narendra Modi on Wednesday, 15 July 2026 welcomed the Union Cabinet's approval of a major new mobile phone manufacturing scheme, calling it 'a massive boost' to the Make in India initiative and India's broader electronics manufacturing ecosystem. The scheme carries an outlay of Rs 62,500 crore and is designed to scale up production, deepen domestic value addition, and strengthen supply chains across the sector.

Context

In his post on X, Prime Minister Modi described the Cabinet's approval of the Mobile Phone Manufacturing Scheme as a landmark step, stating it would 'scale up production, deepen domestic value addition, strengthen supply chains and create' — the post indicating further downstream benefits for employment and the ecosystem. The announcement positions the scheme as a direct extension of India's decade-long manufacturing ambitions anchored in the Make in India programme, launched in September 2014.

The scale of the new outlay — Rs 62,500 crore — is substantially larger than the Rs 38,454 crore committed under the original Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing approved by the Union Cabinet in April 2020, signalling a significant escalation in state support for the sector.

Policy Backdrop

India's push to build a domestic mobile phone manufacturing base has unfolded in successive policy layers over the past decade. The Make in India programme set the strategic direction in 2014, the PLI scheme in 2020 provided targeted fiscal incentives tied to incremental production, and the India Semiconductor Mission launched in 2021 extended the framework to components and chips.

Global contract manufacturers have progressively expanded facilities in states including Tamil Nadu, Uttar Pradesh, and Karnataka in response to these incentives, and cumulative mobile phone exports from India have risen sharply since the first PLI round. The new scheme appears designed to push beyond final assembly toward a deeper, more integrated domestic supply chain — a long-stated objective of the Atmanirbhar Bharat agenda.

The Ministry of Electronics and Information Technology is expected to release detailed scheme guidelines, eligibility criteria, and disbursement milestones in the coming weeks.

Stakeholders and Impact

The scheme's primary beneficiaries span the full electronics value chain: mobile handset manufacturers, electronics component suppliers, and state governments that host manufacturing clusters. For manufacturers, the Rs 62,500 crore outlay represents a substantial production-linked fiscal incentive pool that could underwrite capacity expansion and localisation of components currently imported, particularly from China.

State governments in Tamil Nadu, Karnataka, and Uttar Pradesh — which already host significant mobile manufacturing infrastructure — stand to attract additional investment and employment as companies scale to meet scheme eligibility thresholds. Suppliers of sub-components such as display modules, batteries, and printed circuit boards are also expected to benefit as original equipment manufacturers seek to meet domestic value-addition requirements.

What's Next

Industry attention will now shift to the detailed guidelines that the Ministry of Electronics and IT is expected to notify, including the production thresholds, value-addition benchmarks, and disbursement timelines that will determine which companies qualify and how incentives are structured. Quarterly mobile production and export data from the Ministry of Commerce will serve as the primary scorecard for the scheme's early performance.

If the new scheme succeeds in pushing domestic value addition beyond assembly — as its architects intend — India could meaningfully reduce its dependence on imported mobile components and strengthen its position as a global electronics export hub over the next five years.