New Delhi: The government on Friday notified the Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS), which offers incentives over a five-year period to boost indigenous handset production and targets the creation of around 60,000 direct jobs.
The scheme will operate from the current financial year, with effect from financial year 2026-27 to 2030-31, Electronics and Information Technology Secretary S. Krishnan said.
Under the scheme, manufacturers will receive production-linked incentives ranging from 2.25 per cent to 5 per cent on eligible sales of mobile phones made in India. Companies can earn an additional incentive of up to 1.5 per cent for sourcing specified components and sub-assemblies domestically. The Cabinet-approved framework also provides an additional 3 per cent incentive on eligible sales for product design and research and development aimed at building Indian brands.
Krishnan said Indian handset brands will be eligible for higher incentives of 5 per cent as the government looks to support domestic companies seeking to expand in overseas markets.
The scheme, which was approved by the Union Cabinet on July 15, projects cumulative mobile phone production of about Rs 39 lakh crore over its five-year tenure.
The scheme has been structured around two target segments. Target Segment 1 will focus on incentivising mobile phone manufacturing, while Target Segment 2 will support Indian mobile phone brands.
Under the second target segment, eligible applicants will be provided a gestation period of one year, giving them time to scale operations and meet the required criteria before becoming eligible for financial incentives.
Mobile phone manufacturers registered in India with a minimum turnover of Rs 10,000 crore in fiscal 2026 will be eligible to apply under the MPMS. The scheme sets a higher threshold for existing brands seeking to claim incentives, with such companies required to achieve additional sales of Rs 5,000 crore over their total fiscal 2026 sales in each financial year for which they seek financial incentives.
The eligibility criteria are also different for electronics manufacturing services (EMS) players. EMS companies will need to have a minimum turnover of Rs 1,000 crore in fiscal 2026 to qualify under the scheme.
The government’s latest initiative is aimed at strengthening the domestic mobile phone manufacturing ecosystem while encouraging Indian brands to expand their scale and market presence. By creating separate target segments for manufacturers and Indian brands, the scheme seeks to address both production capacity and brand development.
The emphasis on incremental sales for existing brands also indicates that financial incentives will be linked to additional business generated rather than simply supporting existing levels of activity. Companies will therefore need to demonstrate meaningful growth over their FY26 sales base to qualify for incentives.
For EMS players, the Rs 1,000 crore fiscal 2026 turnover threshold provides an entry criterion for participation, potentially bringing established contract manufacturers into the scheme and supporting the broader electronics manufacturing ecosystem.
(IANS)
