₹62,500 crore outlay, ₹39 lakh crore production... How will the new mobile scheme transform India's smartphone industry?

The Central Government has notified the Mobile Phone Manufacturing Scheme (MPMS) with an outlay of ₹62,500 crore. Its objective is to boost India's mobile phone production to approximately ₹39 lakh crore and exports to around ₹15 lakh crore over the next five years. This initiative is expected to generate about 60,000 direct jobs. The scheme will move beyond mere phone assembly in India; it will promote India-made components, Indian intellectual property (IP), domestic design, R&D, and Indian mobile brands.According to Electronics and IT Minister Ashwini Vaishnaw, India's first robust, indigenously owned smartphone brands could emerge within 10 to 14 months—by mid-2027. Apple may also expand its manufacturing in India to include products beyond iPhones. Let us examine this scheme in detail and understand its various aspects.**Target of ₹39 Lakh Crore**The MPMS has a budget of approximately ₹62,500 crore and will be implemented over five financial years, from 2026-27 to 2030-31. It will replace the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing, which concluded on March 31, 2026. The government aims to reach a total mobile phone production value of around ₹39 lakh crore over five years; under the previous scheme, this figure stood at approximately ₹20 lakh crore. The export target has been set at around ₹15 lakh crore—nearly double the ₹7.5 lakh crore target of the previous scheme.**Support Across Two Categories**The MPMS comprises two target categories. Category TS1 covers large mobile phone manufacturers and Electronics Manufacturing Services (EMS) companies. Under this category, incentives will be provided at rates of 2.75% in 2027-28, 2.5% in 2029-30, and 2.25% in 2031. Meanwhile, TS2 covers Indian-owned mobile brands where the IP, design, and R&D are based in India. Eligible Indian brands will receive a 5% incentive on sales, with a provision for an additional 3% incentive for Indian design and R&D. Furthermore, an additional incentive of up to 1.5% may be available for the domestic sourcing of key parts and sub-assemblies.**Phone parts to be manufactured in India**A major focus of the scheme is the domestic manufacturing of mobile phone parts. These include components such as display modules, camera modules, bodies, batteries, USB cables, and connectors. The benefit of domestic sourcing applies only if the relevant parts are used in at least 25% of the mobile phones manufactured by a company within a financial year. The objective is to boost value addition in India rather than merely assembling phones. According to the government, India has already surpassed the 25–28% domestic value addition mark, whereas developed manufacturing economies have reached levels of around 38–40%.**Criteria to qualify as an Indian brand:**Must be registered or incorporated in India.IP and trademarks must be based in India.Management control must rest with Indian citizens.Indian shareholding must exceed 51%.Must possess in-house design and R&D capabilities in India.Must achieve a turnover of at least ₹1,000 crore in the 2025–26 financial year.The government will also verify the companies' design and IP; simply copying a foreign design will not suffice to claim the benefits reserved for Indian brands.**₹10,000 crore turnover requirement for large companies**To qualify under TS1, large mobile manufacturers and contract manufacturers must be registered in India and achieve a turnover of at least ₹10,000 crore in the 2025–26 financial year. Existing brands will also be required to meet annual incremental sales targets over and above their 2026 sales figures. These incremental sales targets are set at ₹5,000 crore for 2027, ₹10,000 crore for 2028, ₹15,000 crore for 2029, ₹20,000 crore for 2030, and ₹25,000 crore for 2031. Meanwhile, to qualify for this category, new brands must achieve annual sales of ₹10,000 crore in India.**Apple and Google May Expand Manufacturing in India**Ashwini Vaishnaw has indicated that Apple could expand its manufacturing in India beyond iPhones to include other products like iPads and Macs. The government also expects Google to shift a significant portion of its device manufacturing for export from China to India. This could enable India to play a larger role in the global electronics supply chain. According to the government, India is the world's second-largest mobile phone manufacturer by volume; approximately 99.2% of mobile phones used in the country are manufactured domestically.**Moving Beyond an Assembly Hub**The PLI scheme helped establish India as a major hub for mobile phone manufacturing and assembly. The focus of the MPMS (Mobile Phone Manufacturing Scheme) is now on the next stage: bringing parts, technology, design, IP, and ownership of Indian brands into the country. According to Electronics and IT Secretary S. Krishnan, the objective is to achieve technological self-reliance, generate higher economic value, and develop indigenous products and IP. The Ministry of Electronics and IT will soon issue detailed guidelines for this initiative.Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. 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