India’s ₹62,500 Cr Mobile PLI Scheme Boosts Domestic Brands

The Indian government has introduced a new ₹62,500-crore Mobile Phone Manufacturing Scheme (MPMS) to significantly enhance both large-scale production and the development of indigenous Indian mobile brands. Union Electronics and IT Minister Ashwini Vaishnaw stated that three Indian companies are expected to launch their own indigenously designed mobile phones within the next 10-14 months under this initiative.

This scheme specifically mandates that Indian brands must possess their own intellectual property and design, moving away from ‘copycat’ products. The government aims to re-establish India’s mobile manufacturing ecosystem, which has faced challenges from tax issues and market competition.

Understanding the Scheme’s Two Segments

The MPMS is strategically divided into two distinct target segments, each with specific criteria and incentive structures. This dual approach ensures comprehensive support across the mobile manufacturing spectrum.

• Target Segment 1 (TS1): This segment aims to solidify India’s position as a major mobile manufacturing hub, including global brands and Electronics Manufacturing Services (EMS) firms. Companies must achieve a minimum turnover of ₹10,000 crore in FY26.
• Target Segment 2 (TS2): Exclusively designed for Indian mobile brands, this segment encourages the development of products with local intellectual property. It requires brands to be incorporated in India, hold their IP and trademark domestically, and have Indian management control with over 51% Indian ownership.

For TS2, a minimum FY26 turnover of ₹1,000 crore is necessary, though no minimum annual threshold-sales requirement applies. This ensures flexibility for emerging Indian design and manufacturing firms.

Incentive Mechanisms and Localisation Focus

The incentives provided under the MPMS vary by segment, reflecting their distinct objectives. These financial boosts are designed to encourage both production volume and deeper domestic value addition.

• TS1 Incentives: Companies receive 2.25% to 5% on incremental sales, with an additional 1.5% for domestic sourcing of key components.
• TS2 Incentives: Indian brands benefit from a 5% incentive on eligible sales, an extra 3% for Indian design and R&D, and up to 1.5% for domestic sourcing, potentially reaching 9.5% of eligible sales.

The domestic sourcing incentive covers critical components such as display modules, camera modules, enclosures, batteries, and USB cables. A localization rate of at least 25% is required for units sold annually to qualify for this incentive.

Projected Impact and Future Outlook

The five-year scheme, running from FY27 to FY31, features a total outlay of ₹62,500 crore, with flexible allocation between the two segments. This significant investment is projected to deliver substantial economic and employment benefits.

• Cumulative mobile phone production is expected to nearly double, reaching approximately ₹39 lakh crore.
• The initiative is also anticipated to generate around 60,000 direct jobs across the manufacturing ecosystem.

Electronics and IT Secretary S Krishnan underscored the overarching objective: achieving technological sovereignty, capturing greater economic value, and fostering Indian products and intellectual property. Detailed implementation guidelines from MeitY are expected to be released soon, providing further clarity on the scheme’s operational aspects.