India Notifies ₹62,500 Crore Mobile Phone Manufacturing Scheme to Deepen Domestic Value Addition

India's electronics sector was heavily import-dependent for decades, with mobile phones almost entirely imported or assembled using foreign-sourced components. The government began reversing this trajectory through the Make in India programme and the Aatmanirbhar Bharat initiative, which together created a policy architecture combining demand-side financial incentives with supply-side ecosystem building. This dual approach sought to attract global manufacturers while simultaneously developing domestic industrial capacity.

The most significant demand-side instrument was the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), notified by the Ministry of Electronics and Information Technology (MeitY). It offered financial incentives tied to incremental production and ran from FY 2020-21 to FY 2025-26, its tenure ending on 31 March 2026. PLI-LSEM is widely credited with transforming India into the world's second-largest mobile phone manufacturer by volume, and smartphones have since become India's largest export category. The supply-side complement includes dedicated manufacturing clusters such as the Telecom Manufacturing Zone (TMZ) at Gwalior, Madhya Pradesh, administered by the Department of Telecommunications (DoT), designed to host the full value chain within an integrated geography.

Despite this progress, two structural gaps persisted. First, PLI-LSEM was time-bound and required a successor to sustain momentum. Second, the higher-value activities — product design, intellectual property, branding, and technology — continued to be owned by companies headquartered abroad. Indian firms established themselves in contract manufacturing, but no Indian-owned smartphone brand emerged to compete with global players. The new Mobile Phone Manufacturing Scheme (MPMS) directly addresses both gaps.