India Launches ₹62,500 Crore Mobile Phone Manufacturing Scheme

The Government of India has officially introduced the Mobile Phone Manufacturing Scheme (MPMS), designed to encourage domestic production of mobile phones through a comprehensive financial incentive framework. Announced on Friday, the scheme involves an allocation of ₹62,500 crore (approximately £6.25 billion) to support both local mobile phone manufacturers and electronics contract suppliers.

Eligibility criteria under the new scheme stipulate that mobile phone manufacturers, including electronic contract firms, must achieve a minimum turnover of ₹10,000 crore by the fiscal year 2026 to qualify for the incentives. Additionally, Electronic Manufacturing Services (EMS) companies that possess at least 51% Indian ownership and reach a turnover of ₹1,000 crore in the same fiscal year will also be eligible.

The MPMS comprises two main components: one focusing on incentivising mobile phone production and the other aimed at fostering Indian mobile brands. The initiative is set to run for five years, commencing from the current financial year. Companies with a majority Indian ownership can benefit from a gestation period of one year to meet the required turnover targets.

Union Minister of Electronics and Information Technology Ashwini Vaishnaw has confirmed that the scheme is officially open from today, with its anticipated effective date set for April 1, 2026. Existing brands must achieve escalated sales targets to qualify for benefits, starting from a baseline of ₹5,000 crore in annual sales, which will incrementally rise each year.

Specific targets for existing brands include reaching ₹5,000 crore in FY27, ₹10,000 crore in FY28, ₹15,000 crore in FY29, ₹20,000 crore in FY30, and finally ₹25,000 crore in FY31. For new brands, eligibility for the incentives will only be conferred once they surpass sales of ₹10,000 crore annually in India.

The calculations for the incentives will be based on eligible sales for each financial year, applying distinct rates: 2.75% for FY27 and FY28, 2.5% for FY29 and FY30, and 2.25% for FY31. Additionally, firms can receive extra incentives, amounting up to 1.5%, linked to domestic sourcing of components such as display modules, batteries, and USB connectors. This initiative could significantly bolster the Indian mobile manufacturing sector while also reducing dependence on foreign components, thereby nurturing local supply chains.

This ambitious move is part of a broader strategy by the Indian government to boost local manufacturing and propel the country onto the global electronics manufacturing stage. As of now, the scheme appears to be a strategic advancement towards achieving self-reliant and competitive domestic production in the fast-evolving mobile technology market.