The scheme aims to double domestic production from $78.3 billion, under the previous scheme to $156.7 billion. Any existing brand must meet the minimum standard of $522.4 million and above the total sale of FY 2026 to be eligible for benefits under the scheme.
The recently notified mobile phone manufacturing scheme (MPMS), aims to boost domestic value addition (DVA), reduce dependencies on supply chain, and develop homegrown brands through a funding of ₹62,500 crore (almost $7 billion).
The scheme is also expected to help aggregate demand in the electronic component manufacturing scheme (ECMS), and develop an efficient ecosystem for the same.
MPMS is divided into two target segments: Target segment-1 (TS1) and Target segment-2 (TS2). TS1is for bigger mobile phone or electronic component manufacturers with an annual turnover of $1.04 billion in FY 2026. While TS2 is for companies and manufacturers with a 51 percent Indian ownership and a turnover of $104.5 million.
MPMS, which will be applicable from this fiscal year for the next five years, is introduced after the expiry of the mobile PLI scheme. Brands with Indian ownership will get a one year gestation period.
“The Mobile Phone Manufacturing Scheme (MPMS) is expected to build on the success of the earlier scheme, with mobile phone production increasing 33X and mobile phone exports increasing 165X in FY26 as compared to FY15,” said Prashant Singhal, telecom and clients & industries leader, EY India, in a statement.
Singhal added that the scheme will provide greater incentives for domestic value addition, promote backward integration and help reduce supply chain dependencies.
The scheme provides 1.5 percent additional incentive for localising critical sub-assemblies such as camera modules, display assemblies, mechanics and battery cells, alongside a 3 percent incentive for domestic R&D and product design under TS2.
MPMS aims to double domestic production from $78.3 billion (₹7.5 lakh crore), under the previous scheme to $156.7 billion (₹15 lakh crore). Any existing brand is supposed to meet a minimum threshold of $522.4 million (₹5000 crore) of sales in FY26, to avail benefits under the scheme.
A new brand can only avail the benefits after scoring a total annual sales target of $1.04 billion. The incentive amount will be eligible sales in a financial year multiplied by the incentive rates, 2.75% in FY27 and FY28, 2.5% in FY29 and FY30, and 2.25% in FY31.
Presently India’s smartphone market is dominated by Chinese brands like Oppo, Vivo, Xiaomi and others. Noida based Lava, is the only homegrown brand but faces tough competition from the rivals.
