JAIPUR— India has moved into the next phase of its mobile manufacturing strategy with the government notifying the ₹62,500-crore Mobile Phone Manufacturing Scheme (MPMS), a five-year programme designed not only to increase smartphone production but also to deepen domestic sourcing, promote Indian brands and strengthen the country’s position in global electronics supply chains.
The scheme will operate from FY2026-27 to FY2030-31 and follows the earlier Production Linked Incentive (PLI) programme for large-scale electronics manufacturing, which ended on March 31, 2026. The Union Cabinet had approved MPMS on July 15.
The key difference this time is the policy’s stronger focus on value addition inside India. Instead of concentrating only on assembling more phones, the new framework provides additional incentives for manufacturers that source specified components and sub-assemblies domestically.
What Is the ₹62,500-Crore Scheme?
The ₹62,500 crore is the budgetary outlay of the scheme, not the amount that the government is directly investing into mobile factories.
Under MPMS, eligible manufacturers will receive incentives ranging from 2.25% to 5% of eligible sales, depending on the category and applicable conditions.
The scheme also has two additional incentives that could have a bigger long-term impact on India’s electronics ecosystem.
Companies meeting the required conditions for sourcing specified key components and sub-assemblies from Indian suppliers can receive an additional incentive of up to 1.5%.
For Indian mobile-phone brands, the government has also provided an additional 3% incentive on eligible sales for product design and research and development.
That structure shows where the government wants the industry to go next: from assembly to localisation, design and brand ownership.
₹39 Lakh Crore Production Target: What Does It Actually Mean?
The government expects cumulative mobile-phone production of approximately ₹39 lakh crore during the five-year scheme period.
It also expects the programme to support around 60,000 direct jobs and significantly increase mobile-phone exports. Government-linked information has put the export ambition at around ₹15 lakh crore over the scheme period.
These are targets and projections for the tenure of the scheme, not production or employment already achieved.
That distinction matters because the ₹39 lakh crore figure represents the expected value of production generated during the five years. It should not be interpreted as government spending.
Why Local Sourcing Is the Bigger Story
India has already become a major mobile-phone manufacturing base. The next challenge is to capture more value from every phone manufactured in the country.
A smartphone assembled in India can still contain a large number of imported components. Displays, semiconductors, camera modules, batteries, printed circuit boards and other high-value parts have historically represented areas where India has had significant import dependence.
The new incentive structure attempts to change that equation.
By offering up to 1.5% additional incentive for domestic sourcing, the government is effectively giving manufacturers a financial reason to purchase more eligible components from Indian suppliers.
This could create a multiplier effect.
More local sourcing can mean larger orders for Indian component manufacturers. Higher volumes can justify new factories and technology investments. Over time, that can lead to greater economies of scale and potentially make Indian suppliers more competitive globally.
That is arguably more important for India’s long-term electronics strategy than simply increasing the number of phones assembled domestically.
India’s Mobile Manufacturing Story Has Already Changed
The new scheme builds on the results of the first mobile PLI programme.
According to government figures cited around the transition to the new scheme, mobile-phone production under PLI 1.0 reached approximately ₹11.61 lakh crore, against a target of ₹8.12 lakh crore. Investment crossed ₹20,500 crore, substantially above the original ₹7,000-crore target.
The government has also said that the broader electronics ecosystem has attracted around $14 billion in investment since the launch of PLI 1.0, while mobile manufacturing and related activities now support roughly 12 lakh jobs.
The policy therefore isn't starting from zero. India already has a sizeable manufacturing base; MPMS is intended to take that ecosystem deeper into the value chain.
Exports Could Become the Next Growth Engine
India’s mobile-phone export story has changed dramatically over the past decade.
Government data shows that mobile-phone exports increased sharply between 2014 and 2025, while smartphones have become one of the country's most important electronics export categories.
The new scheme comes at an important time because global electronics companies continue to diversify manufacturing beyond China.
For manufacturers, India offers a combination of a large domestic market, an expanding electronics ecosystem and growing manufacturing capabilities.
The objective now is to ensure that India is not simply the place where a foreign-designed phone is assembled, but increasingly a location where components are made, products are designed and brands are developed.
Which Stocks Could Benefit?
The scheme could have implications for India’s listed electronics manufacturing and component ecosystem, although eligibility for MPMS incentives must be assessed company by company. Being an electronics manufacturer does not automatically make a company eligible.
Dixon Technologies
Dixon Technologies is one of the clearest listed names to watch because of its large exposure to mobile-phone contract manufacturing.
Dixon has already been expanding its smartphone manufacturing footprint. Its proposed joint venture with Vivo, in which Dixon will hold a 51% stake and Vivo India 49%, received government approval in July. The JV is expected to undertake part of Vivo’s smartphone manufacturing orders in India.
Dixon has also indicated that the new mobile manufacturing scheme could support exports and localisation.
That does not mean the stock will automatically benefit from the scheme. Investors still need to watch margins, execution, customer concentration and valuation.
Kaynes Technology
Kaynes Technology India is another company that could benefit from the broader localisation trend, although its business extends well beyond mobile phones.
Kaynes is expanding into semiconductor packaging and PCB manufacturing, with its management recently highlighting these businesses as strategic growth engines.
The important point is that MPMS is part of a much wider government push to build an Indian electronics supply chain. That creates opportunities for companies operating further down the value chain, not just handset assemblers.
Syrma SGS
Syrma SGS Technology is another electronics manufacturing player to watch as localisation increases.
The company operates across electronics manufacturing and design-led services, while its recent strategy also includes expansion into higher-value electronics and semiconductor-related opportunities.
However, investors should distinguish between potential sector beneficiaries and confirmed scheme beneficiaries. The latter will depend on the detailed eligibility requirements and company-specific approvals.
The Real Winner May Be the Component Ecosystem
The most interesting part of MPMS may ultimately be companies that supply components rather than companies that simply assemble smartphones.
This is because the policy is explicitly trying to increase domestic sourcing.
If manufacturers shift more procurement toward Indian suppliers, companies involved in areas such as PCBs, camera modules, displays, batteries, connectors, enclosures and other electronic sub-assemblies could see greater opportunities.
This also fits with the broader direction of India’s electronics policy, including the Electronics Component Manufacturing Scheme.
The government’s strategy is increasingly moving toward building an ecosystem rather than subsidising a single stage of production.
What Could Go Wrong?
The scheme is positive for the sector, but it does not eliminate the challenges facing Indian electronics manufacturers.
The industry remains capital-intensive and technology changes quickly. Global competition is intense, while Chinese suppliers continue to have significant advantages in scale and component ecosystems.
There is also a risk that incentives could encourage production without creating enough domestic value addition if manufacturers continue relying heavily on imported high-value components.
That is precisely why the localisation component of MPMS is important.
The success of the programme should therefore not be measured only by the number of phones produced in India. A better test will be whether the percentage of value created inside India increases meaningfully over the next five years.
What This Means for Investors
For the stock market, MPMS creates a potentially favourable long-term backdrop for India’s electronics manufacturing sector.
But investors should avoid treating every electronics stock as a direct beneficiary.
The companies with the strongest potential are likely to be those that can combine large production capacity, global customers, strong execution, increasing localisation and healthy return on capital.
The scheme can provide an additional tailwind, but earnings growth will ultimately depend on orders, margins and execution.
Aurelius Business View
The ₹62,500-crore MPMS is significant not because India needs to learn how to assemble more smartphones. That phase has already scaled up.
The bigger opportunity is to move from “Made in India” assembly to a deeper “Made in India” electronics ecosystem.
The additional 1.5% incentive for domestic component sourcing and 3% support for design and R&D are therefore arguably more important than the headline incentive itself.
If manufacturers respond by increasing local procurement and Indian suppliers can scale up competitively, the next five years could see India capture a much larger share of the value generated by the global smartphone supply chain.
For investors, the theme to watch is consequently broader than mobile phones: electronics manufacturing, components, EMS, displays, PCBs, semiconductor packaging and design.
The government has provided the policy push. The real test now will be whether Indian companies can convert that support into globally competitive products, deeper supply chains and sustainable earnings growth.
Disclaimer: This article is for informational purposes only and should not be considered investment advice. Scheme eligibility, incentives and company-specific benefits are subject to government guidelines and applicable conditions. Investors should conduct independent research before making investment decisions.
