India Launches ₹62,500 Crore Scheme to Pivot Mobile Sector from Assembly to Innovation

The Ministry of Electronics and Information Technology (MeitY) has notified the Mobile Phone Manufacturing Scheme (MPMS), a strategic pivot designed to transform India into a global hub for electronics design. The initiative marks a critical transition from a model based on simple assembly to one driven by indigenous innovation and high-value engineering.

Backed by a budgetary outlay of ₹62,500 crore, the MPMS will operate over a five-year period from FY 2026–27 to FY 2030–31. Electronics and IT Minister Ashwini Vaishnaw stated that the scheme targets cumulative mobile phone production of approximately ₹39 lakh crore during its tenure. Beyond production value, the government expects the initiative to generate nearly 60,000 direct jobs.

The Shift from PLI

The MPMS serves as the direct successor to the Production Linked Incentive (PLI) scheme for mobile phones, which concluded on March 31, 2026. This transition follows significant domestic success; currently, 99.2% of mobile phones used within India are manufactured domestically. This momentum has already extended beyond borders, with smartphones becoming India's largest exported product category in 2025.

Despite these gains, the industry has remained tethered to a low-value-addition model. While assembly is widespread, India continues to rely heavily on imports for critical, high-value components, including semiconductors, camera modules, and display panels. This dependency has created a bottleneck that the MPMS is specifically designed to break.

Pursuing Technological Sovereignty

By shifting focus toward research and development (R&D) and product design, the MPMS is a bid for "technological sovereignty." The goal is to reduce strategic reliance on imports from manufacturing giants like China and Vietnam. By incentivizing the creation of components within India, the government aims to foster the growth of indigenous mobile brands capable of competing on a global scale.

This move signals a broader industrial strategy: moving up the value chain. Rather than merely providing the labor for final assembly, India is positioning itself to own the intellectual property and the complex hardware that powers the devices.

Future Outlook

As the scheme rolls out toward 2031, the industry will monitor the actual rate of domestic component adoption. The success of the MPMS will be measured not just by the total value of phones produced, but by the percentage of those devices designed and sourced within Indian borders. The coming years will determine if India can successfully bridge the gap between being a global assembly line and becoming a global innovator.