Govt notifies Rs 62500 cr Mobile Phone Manufacturing Scheme (MPMS): Check eligibility, incentives and more

The government has recently notified the mobile phone manufacturers about the all-new Mobile Phone Manufacturing Scheme (MPMS). Under this scheme they can seek financial incentives or investments for scaling and incremental business growth. The scheme has two parts. The first encourages companies to manufacture more mobile phones in India. The second part provides benefits to eligible Indian mobile phone brands after a year of preparation. Manufacturers must fulfil a minimum turnover requirement for FY26 in order to be eligible. Established brands must also demonstrate further growth to be eligible for incentives. Moreover, separate rules have been set for electronics manufacturing services (EMS) companies because they play a different role in the manufacturing process.

MPMS scheme: Effective date and incentives

The scheme will operate from the current financial year, with effect from April 1, 2026, Ministry of Electronics and Information Technology Secretary S. Krishnan said. Moreover, it will run through the financial year 2031.

Under the scheme the companies will get 2.25 to 5 per cent incentives on eligible mobile sales made in India. Moreover, they can also claim up to 1.5 per cent extra incentives for using locally made components.

If a company does product designing and R&D in India, then they are also eligible for an additional 3 per cent incentive. Lastly, Indian mobile brands can get up to 5 per cent incentives to help them expand in global markets.

Also read: Want to buy iPhone 16? You can save over Rs 9,000 on Flipkart, here is how

MPMS scheme: Working

The government notified the rules and regulations on August 21. The MPMS scheme is divided into two parts, notably Target Segment 1 and Target Segment 2. Under the first segment the focus will be on incentivising mobile phone manufacturing broadly, while the second part will support eligible Indian mobile phone brands, as they will be provided a gestation period of one year.

If you’re not aware, then let me tell you that a gestation period allows the new applicants, local brands, or component makers time to set up plant machinery, build supply chains, and scale operations before mandatory commercial production and incentive claims kick in.

MPMS: Eligibility criteria for mobile phone manufacturers

According to the scheme, mobile phone manufacturers registered in India will need to have a minimum turnover of Rs 10,000 crore in fiscal 2026 to apply. However, if an existing brand is seeking financial incentives under the MPMS scheme, then there is a higher threshold for them.

They are required to show sales growth above their FY26 base, and this required increment rises each year they claim incentives, which is Rs 5,000 crore higher than the FY26 base in FY27, Rs 10,000 crore higher in FY28, Rs 15,000 crore higher in FY29, Rs 20,000 crore higher in FY30, and Rs 25,000 crore higher in FY31. In other words, the growth threshold is not a flat Rs 5,000 crore added every year. Rather, it escalates by Rs 5,000 crore increments annually.

Also read: Starlink vs Tata Nelco: Technology, target market, ecosystem, price and more compared

Do note that the companies will not be able to qualify simply by maintaining their existing sales levels, as the government linked the incentives to fresh business growth. They will have to show that they have expanded their business beyond their FY26 base and by a progressively larger margin each subsequent year.

The second segment also gives eligible companies one year to prepare. This time allows them to grow their business and meet the scheme’s requirements before they can receive financial support.

MPMS: Eligibility rules for EMS companies

The government has also introduced separate rules for electronics manufacturing services (EMS) companies. To qualify for the grants, EMS companies (with 51 per cent Indian ownership) must have a minimum turnover of Rs 1,000 crore in FY2026.