SYLLABUS

GS-3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Context: The Union Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore to strengthen India's mobile phone manufacturing ecosystem and enhance its global competitiveness.

About the Mobile Phone Manufacturing Scheme (MPMS)

• It is a Central Sector Scheme with a budgetary outlay of ₹62,500 crore. 

• The scheme will be implemented for five years, from FY 2026–27 to FY 2030–31. 

• It aims to: 

• Scale up mobile phone production. 
• Deepen domestic value addition. 
• Strengthen supply chain resilience. 
• Enhance global competitiveness in electronics manufacturing. 
• Build globally competitive Indian mobile phone brands. 
• Promote technological sovereignty through indigenous design, research & development (R&D), and patent creation. 

• The scheme provides: 

• 2.25%–5% incentive on eligible sales of mobile phones manufactured in India. 
• Up to 1.5% additional incentive for domestic sourcing of key components and sub-assemblies. 
• 3% additional incentive on eligible sales for Indian brands undertaking product design and R&D. 

• During its tenure, the scheme is expected to:

• Cumulative mobile phone production of about ₹39 lakh crore. 
• Significant increase in mobile phone exports. 
• Creation of around 60,000 direct jobs. 

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

• It aims to build on its achievements by promoting higher domestic value addition and a stronger component ecosystem. 

India's Status in Mobile Manufacturing

• India is the world's second-largest mobile phone manufacturer by volume. 

• 99.2% of mobile phones used in India are manufactured domestically. 

• Mobile phone manufacturing has become the anchor of India's electronics manufacturing ecosystem. 

• Under the Make in India initiative: 

• Electronics manufacturing has grown seven-fold since FY 2014–15. 
• Electronics exports have increased eleven-fold during the same period. 

• Smartphones became India's largest export product category in 2025, surpassing traditional exports such as diesel fuel and cut diamonds. 

• According to MeitY: 

• Mobile phone production increased from ₹18,900 crore (FY 2014–15) to ₹6.27 lakh crore (FY 2025–26). 
• Mobile phone exports increased from ₹1,566 crore to ₹2.60 lakh crore during the same period. 

• Mobile phones have risen from being India's 153rd largest export item in FY 2014–15 to the largest export product in FY 2025–26. 

Significance

• Strengthens Manufacturing Ecosystem: The scheme promotes a shift from mobile phone assembly to higher domestic value addition by strengthening the local manufacturing ecosystem. 

• Enhances Supply Chain Resilience: It encourages domestic sourcing of key components and sub-assemblies, reducing import dependence and building resilient supply chains. 

• Promotes Investment & Innovation: The scheme provides long-term policy certainty to attract fresh investments while encouraging indigenous design, R&D and patent creation. 

• Supports Indian Brands: It enables Indian mobile phone brands and Original Design Manufacturers (ODMs) to move beyond contract manufacturing and develop globally competitive products. 

• Strengthens Global Competitiveness: The scheme enhances India's integration into Global Value Chains (GVCs) by building advanced manufacturing capabilities, engineering expertise and supplier networks. 

• Boosts Economy & Employment: It is expected to increase exports, generate employment, and contribute to overall economic growth.