The Mobile Phone Manufacturing Scheme (MPMS)

Context: The Ministry of Electronics and Information Technology (MeitY) has officially notified the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore spanning FY 2026-27 to FY 2030-31.

About The Mobile Phone Manufacturing Scheme (MPMS):

What It Is?

• The Mobile Phone Manufacturing Scheme (MPMS) is a comprehensive central production-linked financial incentive framework designed to boost large-scale handset assembly, incentivize domestic component sourcing, and build end-to-end intellectual property (IP), research, and design capabilities for Indian-owned smartphone brands.

Nodal Ministry: Ministry of Electronics and Information Technology (MeitY), Government of India.

Implementation Period: 5 Years (FY 2026–27 to FY 2030–31) with an empowered committee overseeing performance disbursements.

Aim: To transform India from an electronics assembly hub into a design, component-manufacturing and IP powerhouse, raising domestic value addition from 23% to 35–40%.

Key Features of the MPMS:

• Dual-Track Target Segmentation:

• • Target Segment 1 (TS1): Incentivizes large-scale domestic and global manufacturers/EMS players with sales incentives ranging from 2.25% to 5% on incremental handset production.
  • Target Segment 2 (TS2): Specifically fosters Indian Mobile Phone Brands with a fixed 5% incentive alongside an optional 1-year gestation period.

• Dedicated Design & R&D Incentives: Provides an additional 3% incentive on eligible sales for Indian brands investing in domestic research, product design, and patent generation to establish indigenous technological sovereignty.
• Local Component Sourcing Bonus: Grants an extra up to 1.5% incentive to manufacturers in both segments who source key sub-assemblies domestically for at least 25% of handsets produced annually.
• Tailored Eligibility & Turnover Thresholds: TS1 applicants require a minimum base turnover of ₹10,000 crore (FY 2025–26), whereas Indian brands under TS2 operate under an accessible ₹1,000 crore turnover threshold.
• Strict Indian Brand Ownership Criteria: Qualifying domestic brands must be incorporated in India, maintain over 51% shareholding and management control with Indian citizens, and hold registered IP and trademarks locally.

Significance:

• Promotes full-stack electronics manufacturing by integrating components and semiconductors, raising domestic value addition from 23% toward 40%.
• Expected to create 60,000 direct jobs, generate ₹39 lakh crore in production and over ₹15 lakh crore in exports.