India launches ₹62,500-crore mobile phone manufacturing scheme

The Government of India has notified the ₹62,500-crore Mobile Phone Manufacturing Scheme (MPMS) to accelerate domestic production and increase local value addition. Effective from April 1, 2026, for a five-year term, the policy aims to shift the electronics industry from simple final assembly toward higher-value manufacturing, such as printed circuit boards, camera modules, and batteries.

Under the scheme, manufacturers can receive incentives ranging from 2.25% to 5% on eligible sales. Additional support includes a 1.5% incentive for domestic sourcing of key components and a 3% incentive for Indian brands focusing on product design and R&D.

A report by Kotak Institutional Equities suggests that exports will be the primary driver for companies to qualify for these incentives. The report notes that achieving the scheme's 15% annual sales growth target through the domestic market alone may be challenging, given that India's domestic smartphone market has seen limited volume growth in recent years.