India has emerged as the world’s second-largest mobile phone manufacturer by volume, with approximately 99.2% of the mobile phones used in the country now being manufactured domestically. On 15 July 2026, the Union Cabinet approved the Mobile Phone Manufacturing Scheme (MPMS) with a total budgetary outlay of Rs. 62,500 crore for five years, from FY 2026-27 to FY 2030-31. 

The key features of the MPMS include:

•Incentive support at differentiated rates ranging from 25% to 5% of eligible sales from mobile phones manufactured in India;

•An additional incentive of up to 5% linked to the domestic sourcing of key components and sub-assemblies;

•An additional incentive of 3% of eligible sales for product design and R&D to support the development of Indian brands, promote technological sovereignty and encourage the creation of Indian patents;

•Expected cumulative mobile phone production of approximately 39 lakh crore over the scheme’s implementation period; and

•Creation of approximately 60,000 direct employment opportunities, along with potential indirect employment across component manufacturing, logistics, packaging and other ancillary sectors.

The MPMS follows the conclusion of the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing and appears to represent the next phase of the Government’s policy support for India’s mobile phone manufacturing ecosystem. Its focus on domestic sourcing and indigenous R&D may contribute to greater domestic value addition, a more resilient supply chain and enhanced global competitiveness.

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