Govt Unveils Rs 62,500-Crore Mobile Phone Manufacturing Scheme To Boost Domestic Production

New Delhi, Aug 22 (KNN) The government on Friday notified the Rs 62,500-crore Mobile Phone Manufacturing Scheme (MPMS) to expand mobile phone production in India, deepen domestic supply chains and support Indian-owned mobile brands.

The five-year scheme will run from FY2026-27 to FY2030-31 and aims to improve India’s global competitiveness by increasing domestic value addition (DVA), manufacturing capabilities and indigenous design and intellectual property.

Electronics and IT Minister Ashwini Vaishnaw said the scheme would support Indian-owned brands, intellectual property and product design. He said the government would assess whether the ownership of intellectual property, design and brands is genuinely Indian.

Vaishnaw also attributed recent increases in smartphone prices partly to global demand for memory chips from AI data centres. He said rising domestic memory production capacity could help stabilise supply over time.

Two Target Segments

MPMS has two segments. Target Segment 1 (TS1) provides production-linked incentives for mobile phone manufacturing, while Target Segment 2 (TS2) supports Indian mobile phone brands.

Under TS1, eligible manufacturers, including electronics manufacturing services (EMS) companies registered in India, must have a minimum turnover of Rs 10,000 crore in FY2025-26. The incentive will range from 2.25 per cent to 5 per cent.

TS2 covers manufacturers with a minimum turnover of Rs 1,000 crore in FY2025-26 that qualify as Indian brands. Such companies must be incorporated in India, have their intellectual property and trademarks in India, be controlled by Indian citizens, have more than 51 per cent Indian ownership and maintain in-house R&D and design capabilities in the country.

Indian brands will receive a 5 per cent incentive, with an additional 3 per cent incentive for Indian design and R&D. The government will also provide non-fiscal support. TS2 applicants may receive a one-year gestation period.

Incentive for Local Sourcing

The scheme provides an additional incentive of up to 1.5 per cent for domestic sourcing of key components and sub-assemblies, provided these components are localised for at least 25 per cent of the mobile phones manufactured by an applicant in a financial year.

The measure is intended to deepen domestic manufacturing of components and reduce dependence on imported inputs.

Rs 39 Lakh Crore Production Target

The government expects cumulative mobile phone production to reach around Rs 39 lakh crore during the scheme period, accompanied by a significant increase in exports.

MPMS is also expected to generate around 60,000 direct jobs and strengthen India’s position as a global electronics manufacturing hub.

(KNN Bureau)