India’s Mobile Phone Manufacturing Scheme: Boosting Domestic Production, Innovation, and Indian Brands

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 24.08.2026

India’s Mobile Phone Manufacturing Scheme: Boosting Domestic Production, Innovation, and Indian Brands

India’s Mobile Phone Manufacturing Scheme (MPMS) is a landmark initiative by the Ministry of Electronics and Information Technology (MeitY) to propel the country into a global leader in mobile phone production. Launched in alignment with the Prime Minister’s Make in India vision, the scheme aims to boost domestic manufacturing, foster Indian brands, and generate large-scale employment.

Background and Rationale

Since FY 2014-15, India’s electronics manufacturing sector has grown sevenfold, with exports increasing eleven times. Mobile phones have become the country’s top exported product, surpassing traditional exports like diesel fuel and cut diamonds. This remarkable growth has created significant employment opportunities, especially for youth in rural areas, with some manufacturing plants employing up to 20,000 people.

To sustain this momentum and enhance competitiveness, the MPMS was introduced, focusing on both global and domestic players in the mobile phone industry.

Key Objectives

Enhance Global Competitiveness: Increase the scale and depth of the mobile manufacturing supply chain through higher domestic value addition and stronger manufacturing capabilities.
Support Indian Brands: Foster the growth of Indian mobile phone brands and encourage innovation.
Generate Employment: Create jobs across the value chain, from manufacturing to R&D.

Budget and Tenure

Total Outlay: ₹62,500 crores (including administrative charges)
Scheme Duration: 5 years (FY 2026-27 to FY 2030-31)

Target Segments

The scheme is divided into two main segments:

TS1: Incentivising Mobile Phone Manufacturing
- For manufacturers (including EMS) with a minimum turnover of ₹10,000 crore in FY 2025-26.
- Existing brands must achieve incremental annual sales over FY 2025-26, starting at ₹5,000 crore and increasing by ₹5,000 crore each year.
- New brands become eligible after reaching ₹10,000 crore in annual sales.
TS2: Supporting Indian Mobile Phone Brands
- For Indian brands with a minimum turnover of ₹1,000 crore in FY 2025-26.
- Brands must be registered in India, with IP and management control held by Indian citizens, and demonstrate in-house R&D and design capabilities.
- No minimum threshold sales required; selection is by an Empowered Committee.

Incentive Structure

For TS1 (Mobile Phone Manufacturing)

Incentive Rates: Tapered rates from 2.75% to 2.25% for the first part of eligible sales, and from 5% to 4% for sales above a certain threshold, over the five-year period.
Additional Incentives: Up to 1.5% extra for domestic sourcing of key components (display modules, camera modules, enclosures, batteries, USB cables) if at least 25% of units sold use localized components.

For TS2 (Indian Brands)

Incentive Rate: 5% on eligible sales.
Additional Incentives: Up to 1.5% for domestic sourcing (same as TS1) and an extra 3% for Indian design and R&D.
Non-Fiscal Support: The government may introduce further non-fiscal measures to strengthen Indian brands.

Eligibility and Application Process

Only one application per applicant is allowed.
Eligibility under MPMS does not affect eligibility for other government schemes.
Incentives are disbursed quarterly, based on meeting eligibility and performance criteria.

Implementation and Oversight

Project Management Agency (PMA): Responsible for appraising applications, verifying eligibility, and monitoring scheme progress.
Empowered Committee (EC): An inter-ministerial body that reviews applications, recommends approvals, and oversees scheme performance.

Flexibility and Amendments

The scheme allows for periodic review and amendments to ensure effective implementation, including changes to products covered, incentive rates, and tenure.

Conclusion

The Mobile Phone Manufacturing Scheme is a strategic move to position India as a global manufacturing hub, support indigenous brands, and create sustainable employment. By offering robust fiscal and non-fiscal incentives, the MPMS is set to transform the landscape of mobile phone manufacturing in India.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

Source: Meity

Disclaimer

Handy Download:

Mobile Phone Manufacturing SchemeDownload

Connect with us for more-

@ Team S J EXIM SERVICES, New Delhi, IN

CP: Ms. Shubhra Jha, Founder

Tel: +91-11-4999 2707 I +91-9999005693

Web: www.sjexim.services

EMAIL: operations@sjexim.services I shubhra@sjexim.services

Facebook: www.facebook.com/sjeximservices

LinkedIn: https://www.linkedin.com/company/90794255/admin/feed/posts/