Centre Doubles Down On Mobile Manufacturing With ₹62,500 Cr Scheme

In a bid to boost mobile phone manufacturing in the country, the Union Cabinet approved a Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 Cr. The scheme, which will have a five year tenure till FY31, aims to boost phone manufacturing by offering incentives of up to 5% on eligible sales and additional benefits for domestic sourcing and research and development (R&D).

Companies can also claim an additional incentive of up to 1.5% for sourcing key components and sub-assemblies domestically.

In a push to build homegrown smartphone brands, the Centre will offer an additional 3% incentive on eligible sales for product design and R&D.

The government expects the scheme to drive cumulative mobile phone production of about ₹39 Lakh Cr over its five-year tenure. It is also projected to create around 60,000 direct jobs.

“Smartphones have emerged as the single largest exported product category from India in 2025, surpassing traditional leading export items such as diesel fuel and cut diamonds. Mobile phones now constitute a major share of India’s electronics production and exports and are playing a critical role in strengthening India’s position in global value chains,” the government said.

The scheme succeeds the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which ended on March 31, 2026.

Mobile manufacturing has been on the top of the list of agendas of the incumbent central government to push manufacturing, increase domestic capabilities and bring in foreign investments.

The government said that the Indian mobile phone manufacturing sector has now evolved from being a net importer of mobile phones to becoming the world’s second largest mobile phone manufacturer and a major global export hub.

Mobile phone production has grown from ₹18,900 Cr in 2014-15 to ₹6.27 Lakh Cr in 2025-26, a 33X jump. During the same period, mobile phone exports have surged from ₹1,566 Cr to ₹2.60 Lakh Cr, growing 165X.

“Reflecting this transformation, mobile phones have moved from the 153rd largest export item in FY15 to become India’s largest export product in FY26, underscoring the country’s growing competitiveness in global electronics manufacturing,” the MeitY said.

India’s Semiconductor Ecosystem Gets ₹1.28 Lakh Cr Push 

Separately, the Cabinet also approved the second phase of the India Semiconductor Mission, Semicon 2.0, with an outlay of ₹1.28 Lakh Cr to strengthen the country’s chip ecosystem.

Semicon 2.0 will target six areas, spanning chip design, semiconductor equipment and materials, fabrication, packaging, R&D and talent development. The government also plans to support domestic semiconductor intellectual property and system-level products, with 105 startups already developing chips in the country.

The programme will extend incentives to manufacturers of chipmaking equipment and materials and seek to attract further investment in fabrication plants. India’s first semiconductor fab is expected to be commissioned in 2028.

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