Mobile Phone Manufacturing Scheme: India's Next Leap Beyond the PLI Era

Core Context

India's mobile phone manufacturing story really took off with the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing, commonly called PLI-LSEM, launched in 2020 under the Ministry of Electronics and Information Technology, or MeitY. That scheme offered manufacturers a financial incentive on incremental sales of goods made in India, and it worked spectacularly well on one metric: India moved from being a net importer of mobile phones to becoming one of the largest producers and exporters of handsets in the world, with exports climbing from a few thousand crore rupees to roughly two lakh crore rupees within a decade. However, PLI-LSEM was always a time-bound intervention, and it formally lapsed on 31 March 2026, leaving a policy gap at a moment when global electronics supply chains are being actively restructured away from a single-country concentration. The government needed a successor instrument that would not simply repeat the old scale-first approach but push the ecosystem toward deeper value addition, stronger domestic component sourcing, and the emergence of genuinely Indian-owned brands with their own research and design capability.

Latest Developments

MeitY has now notified the Mobile Phone Manufacturing Scheme, or MPMS, with a budgetary outlay of ₹62,500 crore spread across five years, from Financial Year 2026-27 to Financial Year 2030-31. The scheme is structured around two distinct target segments. Target Segment 1, aimed at large-scale manufacturers, offers a differentiated incentive ranging from 2.25 percent to 5 percent on eligible sales of mobile phones made in India, with an additional incentive of up to 1.5 percent available for companies that source specified key components and sub-assemblies domestically. Target Segment 2 is reserved for Indian-owned brands, which are eligible for a flat 5 percent incentive plus an extra 3 percent incentive specifically tied to domestic product design and research and development, a clear signal that this scheme wants to build homegrown intellectual property rather than just assembly-line jobs. Eligibility has also been tightened compared to the earlier scheme: mobile phone manufacturers need a minimum turnover of ₹10,000 crore in Financial Year 2026 to qualify, existing large brands must demonstrate additional incremental sales of ₹5,000 crore each year to keep claiming incentives, and electronics manufacturing services companies need a minimum turnover of ₹1,000 crore. The government expects the scheme to generate around ₹39 lakh crore in cumulative mobile phone production and to create close to 60,000 direct jobs over its five-year life, while strengthening India's position in the global electronics value chain at a time when several multinational brands are actively looking to diversify manufacturing beyond a single country.

UPSC Prelims Angle

• The Mobile Phone Manufacturing Scheme is administered by the Ministry of Electronics and Information Technology, not the Ministry of Commerce and Industry or DPIIT.
• MPMS is explicitly positioned as the successor to the PLI Scheme for Large Scale Electronics Manufacturing, which ended its tenure on 31 March 2026, so questions may test the continuity or the points of departure between the two schemes.
• The scheme's two-segment design, one for large-scale manufacturers and one exclusively for Indian-owned brands with an R&D-linked incentive, is a distinctive feature examiners could use to test a candidate's grasp of the scheme's actual objective beyond just production volume.
• The scheme period, Financial Year 2026-27 to Financial Year 2030-31, and the outlay figure of ₹62,500 crore are classic static-fact targets for a Prelims question.
• This scheme sits within India's broader Make in India and Atmanirbhar Bharat policy framework, and questions could test its objective of strengthening domestic value addition rather than just import substitution.