The Union Cabinet has approved a new ₹62,500 crore scheme aimed at boosting mobile phone manufacturing in India, providing fresh momentum to the country's expanding electronics industry.
The new programme replaces the earlier Production-Linked Incentive (PLI) scheme for mobile phones and is intended to strengthen India's position as a global manufacturing hub. The scheme will be implemented over a five-year period, from FY 2026–27 to FY 2030–31.
Announcing the decision, Union Electronics and Information Technology Minister Ashwini Vaishnaw said India's mobile phone manufacturing sector has witnessed a remarkable transformation over the past decade. He noted that smartphones, which did not feature among India's top 100 export products ten years ago, have now become the country's largest export category.
HOW THE NEW SCHEME WILL WORK
Under the new scheme, companies manufacturing mobile phones in India will receive incentives based on eligible sales. The incentive rate will range between 2.25 per cent and 5 per cent, depending on the criteria specified under the programme.
To encourage greater localisation, the government has also introduced an additional incentive of up to 1.5 per cent for companies that procure a larger share of key components and sub-assemblies from domestic suppliers. The objective is to strengthen local supply chains and reduce dependence on imports.
In addition, Indian brands investing in product design and research and development (R&D) will be eligible for an extra 3 per cent incentive on eligible sales, with the aim of promoting innovation and indigenous product development.
BUILDING ON THE EARLIER PLI SCHEME
The new programme succeeds the previous mobile phone PLI scheme, which had a financial outlay of ₹40,000 crore.
According to Vaishnaw, the government disbursed around ₹19,000 crore in incentives under the earlier scheme, while collecting nearly ₹25,000 crore in tax revenue from the sector. He said this demonstrated that the initiative not only boosted manufacturing but also generated substantial revenue for the exchequer.
India currently manufactures approximately 125 crore mobile phones annually. The minister also observed that countries with robust electronics manufacturing capabilities often go on to develop strengths in advanced sectors such as aerospace and space technology.
WHAT IT MEANS FOR CONSUMERS
The scheme is not expected to result in an immediate reduction in smartphone prices. However, over the longer term, increased domestic manufacturing and greater localisation of components could help lower production costs and improve supply chain efficiency.
This may translate into a wider range of devices, quicker availability of new smartphone models, and improved after-sales service as manufacturing and component production expand within India.
The programme's emphasis on design and research is also expected to encourage Indian companies to develop products better suited to the needs of domestic consumers.
BOOST FOR EXPORTS AND EMPLOYMENT
The government expects the scheme to significantly expand mobile phone production over the next five years, with cumulative output projected to reach approximately ₹39 lakh crore, supported by a substantial increase in exports.
The initiative is also expected to generate around 60,000 direct jobs across manufacturing, assembly, engineering, and related services.
Through the new scheme, the government aims to further strengthen India's electronics manufacturing ecosystem, attract fresh investment, and reinforce the country's position as a major player in the global smartphone supply chain.
