Amidst the ongoing RAM crisis, the Indian Government has introduced a new Mobile Phone Manufacturing Scheme. The scheme is aimed at offering different incentives and investments to help domestic phone production grow exponentially by 2031.
Cabinet Approves Rs 62,500 Crore Mobile Phone Manufacturing Scheme
The Union Cabinet on Wednesday, July 15, 2026, approved a Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS) to encourage smartphone manufacturers to set up shop in India. This new shift is aimed at improving the country's geopolitical position in terms of local mobile phone production and also aims to incentivise the electronics sector.
The MPMS plan will span five years, running from FY 2026 to 2027, and from FY 2030 to 2031. Over the five-year implementation period, the Government is aiming to drive mobile phone production in India exponentially. The current projection for 2031 is Rs 39,000,00 crore.
This roadmap also includes roughly 60,000 direct job creations, future employment generation opportunities and aims to position India as one of the primary electronics and device manufacturing countries.
As for manufacturers, the MPMS plan brings a multi-layered incentive structure which eligible vendors can avail for the 5-year duration. Firstly, it includes base incentives which OEMs can avail based on eligible sales. Phones locally manufactured under the scheme will offer incentive support ranging from 2.25% to 5%.
Secondly, OEMs that source parts from local supply chain vendors will receive an additional incentive of 1.5%. This includes both component sourcing and local sub-assembly.
Lastly, domestic brands like Lava will be eligible to receive a 3% added incentive based on smartphones manufactured and sold via local product designing and R&D.
It is clear that the Indian Government is making it ripe for smartphone manufacturers to set up operations in India and ship locally manufactured and assembled phones globally. Currently, China is the top smartphone manufacturing hub, and with the new MPMS plan, we could see more OEMs flock to India for better incentives.
This also translates to smartphone price stabilisation and could pave the way for manufacturers to offer good smartphones at great values, without worrying about tariffs, sourcing and assembly.
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