The Mobile Phone Manufacturing Scheme (MPMS) is a newly launched macro-level manufacturing incentive scheme approved by the Union Cabinet on July 15, 2026, with a substantial budgetary outlay of ₹62,500 crore. Its origin lies in the government's goal to further scale up production, deepen domestic value addition, and strengthen supply chain resilience, building on the success of its predecessor. The scheme was created to solve the problem of transitioning India from primarily a mobile assembly hub to a globally competitive manufacturing and innovation powerhouse.
The MPMS works by providing direct financial incentive support on eligible sales of mobile phones manufactured in India, with differentiated rates ranging from 2.25% to 5%. A key mechanism is the provision of an additional incentive of up to 1.5% explicitly linked to the domestic sourcing of key components and sub-assemblies, which encourages localized ecosystem manufacturing. Furthermore, to promote indigenous innovation and brand building, the scheme offers an extra 3% incentive on eligible sales for companies investing in product design, research and development (R&D), and the creation of Indian brands. The scheme is set to run for five years, from FY 2026-27 to FY 2030-31.
The MPMS connects directly to the broader Make in India initiative and is a successor to the Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing (PLI-LSEM). The scheme has changed recently, as the MPMS replaced the PLI-LSEM, which successfully concluded its tenure on March 31, 2026. While the core concept of a production-linked incentive remains, the MPMS introduced higher, specific incentives for domestic sourcing and R&D/design to achieve deeper value addition and technological sovereignty, which were not as pronounced in the previous scheme.