Govt approves Rs 62500 crore mobile phone manufacturing scheme: Will your next phone get cheaper?
Follow UsIndia approves the new Mobile Phone Manufacturing Scheme (MPMS) for the next five years.
The scheme offers incentives to boost local manufacturing, R&D, and domestic sourcing.
MPMS aims to increase smartphone production, create 60,000 jobs, and strengthen India's global exports.
The Indian government on Wednesday approved a new Mobile Phone Manufacturing Scheme (MPMS). The new scheme will run for five years from now and is expected to increase production, improve domestic value addition, and make Indian companies more competitive in global markets. The new scheme will replace the earlier Production Linked Incentive Scheme for Large Scale Electronics Manufacturing, which ended in March this year. Earlier this month the government also removed import duties on certain parts that are used to manufacture smartphones. Follow along with the article to learn what MPMS has to offer.
SurveyMPMS: Offerings
The MPMS has a budgetary outlay of Rs 62,500 crore and provides production-linked incentives between 2.25 per cent and 5 per cent on eligible mobile phone sales. Companies that source major components and sub-assemblies from within India can receive an additional incentive of up to 1.5 per cent. The government expects this to encourage manufacturers to build stronger local supply chains instead of relying heavily on imports.
Not only that, but the scheme also focuses on Indian smartphone companies, as the businesses investing in product design and research and development will be eligible for an additional 3 per cent incentive under the programme. However, the incentives will be based on eligible sales. We believe that this move could help the domestic companies develop their own technologies, create patents and improve their presence in international markets.
MPMS: Production target and job creation
Under the new Mobile Phone Manufacturing Scheme (MPMS), smartphone production in India can reach around Rs 39 lakh crore during its five-year tenure. Moreover, it’s also projected to create around 60,000 direct jobs, giving a further push to employment in electronics manufacturing.
India’s mobile manufacturing story
India’s mobile phone industry has grown rapidly over the past decade. According to the government, the country is now the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of phones used in India being produced locally.
India’s mobile phone manufacturing has seen huge growth. In 2014-15, the industry made phones worth Rs 18,900 crore. By 2025-26, this jumped to Rs 6.27 lakh crore, which is a massive increase.
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Furthermore, the exports at the same time have grown even more dramatically as India exported Rs 1,566 crore worth of mobile phones in 2014-15. That number rose to Rs 2.60 lakh crore by 2025-26. Aside from that, during 2025-26, smartphones were one of the top export items, beating every other product the country sells abroad.
