The Indian government has introduced a significant new Mobile Phone Manufacturing Scheme (MPMS) with a substantial budget of ₹62,500 crore. This initiative aims to bolster the country’s position as a global leader in mobile manufacturing and to incentivize domestic production. The scheme is designed to encourage companies to increase their manufacturing capacities and focus on research and development, offering up to 5% in incentives on eligible sales and additional benefits for local sourcing and R&D activities.
### The Mobile Manufacturing Scheme
The MPMS is a strategic move to enhance India’s mobile manufacturing capabilities over the next five years, up to FY31. The scheme offers a comprehensive incentive structure, including an extra 1.5% reward for companies sourcing key components domestically, and a further 3% incentive for product design and R&D. The government aims to achieve a mobile production output of approximately ₹39 lakh crore during this period, while also creating around 60,000 direct employment opportunities. This effort is part of a broader strategy to transition India from a net importer to one of the world’s largest mobile phone manufacturers, a status it has achieved by becoming the second largest globally.
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### Market Context and Funding Environment
The MPMS follows the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which concluded in March 2026. The new scheme builds on the successes of its predecessor, which saw mobile phone production skyrocket from ₹18,900 crore in 2014-15 to ₹6.27 lakh crore in 2025-26. Exports also experienced a dramatic increase, reaching ₹2.60 lakh crore in 2025-26. This growth has positioned mobile phones as India’s largest export category, surpassing traditional exports such as diesel fuel and cut diamonds. The scheme aligns with India’s broader economic goals of increasing manufacturing, boosting domestic capabilities, and attracting foreign investments.
### Implications for India’s Startup Ecosystem
The MPMS is expected to have a significant impact on India’s startup ecosystem, particularly for technology and manufacturing startups. By fostering R&D and local sourcing, the scheme encourages innovation and the development of homegrown technologies. It presents opportunities for startups in component manufacturing and design, aligning with the government’s vision of building a robust domestic electronics ecosystem. The program also complements other government initiatives like the India Semiconductor Mission, aimed at strengthening the chip ecosystem, which further supports technological advancements and startup growth.
The future of India’s mobile manufacturing looks promising with the MPMS. The scheme is poised to attract global manufacturers while empowering local startups to innovate and expand. For founders and investors, this creates a fertile ground for new business ventures and partnerships in electronics and related fields. The next key development to watch is how effectively these incentives translate into increased production and innovation, and whether India can maintain its rapid growth trajectory in the global electronics manufacturing landscape.
