Government Approves Mobile Phone Manufacturing Scheme to Deepen Local Production, Industry Reacts

The government has approved the Mobile Phone Manufacturing Scheme (MPMS), a fresh policy push aimed at strengthening India's domestic mobile manufacturing ecosystem and moving the country further up the global electronics value chain. The scheme seeks to build on India's rapid emergence as a major mobile phone manufacturing and export hub, with a greater emphasis on domestic value addition, local component sourcing and deeper integration of the electronics supply chain.

From Mobile Phone Assembly to Deeper Manufacturing

The new scheme marks the next phase of India's mobile manufacturing strategy following the government's Production Linked Incentive programme for large-scale electronics manufacturing.

The earlier PLI scheme played a significant role in attracting global smartphone manufacturers and their suppliers to expand production in India, while also helping the country emerge as a major exporter of mobile phones.

MPMS will now focus on strengthening the domestic ecosystem that supports this production at scale.

Ashok Gupta, Chairman, Optiemus Electronics Limited (OEL), said the scheme could help India transition beyond its current position as a major mobile assembly destination. "The approval of the Mobile Phone Manufacturing Scheme (MPMS) is a landmark policy intervention that will build on the success of the PLI programme and accelerate India's transition from a mobile assembly hub to a globally competitive manufacturing and innovation powerhouse. The scheme's strong focus on domestic value addition, component sourcing, design-led manufacturing and Indian brands will deepen the electronics ecosystem, strengthen supply chain resilience and enhance export competitiveness," Gupta said.

Building on PLI Success

Industry representatives believe the new scheme could complement the manufacturing scale already created under the PLI programme by focusing on deeper localisation.

Pankaj Mohindroo, Chairman, India Cellular and Electronics Association (ICEA), said, "The earlier, PLI LSEM helped India achieve scale, attract global companies, expand exports, and emerge as the world's second-largest mobile phone manufacturer. MPMS now builds on this foundation by enabling large-scale mobile phone production with deepening of domestic value chain and a stronger component ecosystem."

He added that the capabilities created under the programme could eventually benefit other parts of India's electronics industry.

"These capabilities will extend beyond mobile phones and accelerate growth across the wider electronics industry. By deepening the value chain and sustaining investment, production, and export momentum, MPMS will make mobile phones the foundation of India's next generation of electronics manufacturing leadership," Mohindroo said.

Focus Shifts to Domestic Value Addition

The government's broader electronics manufacturing strategy has increasingly shifted from attracting final product assembly towards building a more comprehensive domestic supply chain.

Mobile phones are particularly important to this strategy because the scale created by smartphone manufacturing can potentially support domestic production of components that are also used across other electronics categories.

A stronger local component ecosystem could also reduce manufacturers' exposure to global supply disruptions while increasing the share of the final product's value generated within India.

The challenge will be to translate India's manufacturing volumes into greater domestic technological capabilities, including component production and design.

India Eyes a Bigger Role in Global Electronics

The MPMS comes as India seeks to establish itself as an alternative global electronics manufacturing destination and increase its share of global supply chains. The country has already attracted significant smartphone production from global manufacturers, while mobile phone exports have grown rapidly in recent years.

With the new scheme, the government is looking to consolidate those gains by ensuring that more of the manufacturing value chain develops within India. If successful, the next phase of India's mobile manufacturing push could therefore be less about how many smartphones are assembled in the country and more about how much of each device is actually designed, sourced and manufactured domestically.