"India Notifies ₹62,500 Crore Mobile Phone Manufacturing Scheme to Deepen Value Addition"
Domestic Value Addition (DVA)
the share of a product's value created within India, covering components, design, and manufacturing rather than just assembly.
Electronics Manufacturing Services (EMS)
companies that manufacture electronic products on behalf of brand owners, handling assembly and production without owning the brand or IP.
India's electronics sector was heavily import-dependent for decades. Mobile phones were almost entirely imported or assembled with minimal domestic content. The government began reversing this 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.
The most significant instrument in this architecture was the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM). It offered financial incentives tied to incremental production, attracting global manufacturers to set up or expand operations in India. PLI-LSEM ran from FY 2020-21 to FY 2025-26 and is widely credited with transforming India into the world's second-largest mobile phone manufacturer by volume. Its tenure ended on 31 March 2026. 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), which aim to host the full value chain within an integrated geography.
Despite this progress, a structural gap remained. Most manufacturing in India was done by global brands, primarily assembling components sourced from abroad. India's share of the higher-value activities in the electronics value chain, design, intellectual property, and brand ownership, remained negligible. The Mobile Phone Manufacturing Scheme (MPMS) is designed to address this gap directly, replacing PLI-LSEM while adding a new strategic layer: building genuinely Indian-owned brands and intellectual property.
The Mobile Phone Manufacturing Scheme (MPMS), notified by the Ministry of Electronics and Information Technology (MeitY), has a total budgetary outlay of ₹62,500 crore and runs for five years from FY 2026-27 to FY 2030-31. It has two distinct target segments with different objectives and incentive structures.
Target Segment 1 (TS1) focuses on scaling mobile phone manufacturing broadly. It is open to manufacturers and Electronics Manufacturing Services (EMS) companies registered in India with a minimum turnover of ₹10,000 crore in FY 2025-26. Existing brands must achieve incremental annual sales of ₹5,000 crore above the base year. New brands become eligible only after reaching ₹10,000 crore in total annual sales. The incentive rate under TS1 is differentiated, ranging from 2.25% to 5%, rewarding higher production volumes.
Target Segment 2 (TS2) is the more strategically significant segment. …
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With reference to the Mobile Phone Manufacturing Scheme (MPMS), consider the following statements:
1.Target Segment 2 (TS2) requires more than 51% shareholding by Indian citizens as a mandatory eligibility criterion.
2.The maximum incentive available under TS2, including the design and R&D component, is 8%.
3.The additional incentive for domestic sourcing of components is available only to TS2 applicants, not TS1.
Which of the statements given above is/are correct?
Which of the following correctly describes the minimum localisation condition for availing the additional 1.5% domestic sourcing incentive under MPMS?
What is the minimum turnover eligibility threshold for a new mobile phone brand to qualify under Target Segment 1 (TS1) of the Mobile Phone Manufacturing Scheme (MPMS)?
Which of the following best explains why MPMS's Target Segment 2 (TS2) represents a qualitative departure from the PLI-LSEM approach to mobile phone manufacturing?
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