India Launches Rs 62,500-Crore Mobile Phone Manufacturing Scheme

The Government of India notified the Rs 62,500-crore Mobile Phone Manufacturing Scheme (MPMS) on August 21, 2026. Effective from April 1, 2026, through FY31, the program aims to transition India from an assembly hub for global brands into a creator of domestic smartphones with original intellectual property. The scheme replaces a previous production-linked incentive program and seeks to double domestic production by value to Rs 15 lakh crore.

The MPMS is divided into two segments. Target Segment 1 (TS1) focuses on general manufacturing for companies with a minimum FY26 turnover of Rs 10,000 crore, offering sales incentives between 2.25% and 5%. Target Segment 2 (TS2) supports Indian-owned brands with a minimum turnover of Rs 1,000 crore, providing a 5% sales incentive and an additional 3% for domestic R&D and design. To qualify for TS2, companies must prove their designs are original and not "copycats."

Union Minister Ashwini Vaishnaw stated the government is coordinating with three potential Indian players to launch domestic brands within 10 to 14 months. He also indicated that Apple Inc. may expand its Indian operations beyond the iPhone and that Google LLC may use India as a major export base to diversify away from China. While industry bodies praised the move to deepen the supply chain, Kotak Institutional Equities noted that a 15% annual sales growth baseline in TS1 makes exports the primary lever for brands to maximize incentive payouts.