{"id":120633,"date":"2026-08-23T11:11:08","date_gmt":"2026-08-23T05:41:08","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=120633"},"modified":"2026-08-23T14:22:56","modified_gmt":"2026-08-23T08:52:56","slug":"mobile-phone-manufacturing-scheme-mpms","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/mobile-phone-manufacturing-scheme-mpms\/","title":{"rendered":"Mobile Phone Manufacturing Scheme (MPMS) &#8211; From Assembly Hub to Indian-Owned Brands"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>Mobile Phone Manufacturing Scheme (MPMS) Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Government has notified the \u20b962,500-crore Mobile Phone Manufacturing Scheme (MPMS) for five years from FY 2026-27 to FY 2030-31.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It <\/span><b>succeeds <\/b><span style=\"font-weight: 400;\">the Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing (<\/span><b>PLI-LSEM<\/b><span style=\"font-weight: 400;\">), whose tenure ended on March 31, 2026.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The new scheme seeks to move India beyond large-scale assembly towards higher domestic value addition (<\/span><b>DVA<\/b><span style=\"font-weight: 400;\">), indigenous design and R&amp;D, stronger component supply chains and globally competitive Indian brands.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Need for the New Scheme<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India has emerged as a major global mobile-phone manufacturing hub, but much of the value captured in the sector remains concentrated in assembly and foreign-owned brands.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The MPMS therefore attempts to address the \u201c<\/span><b>assembly versus value creation<\/b><span style=\"font-weight: 400;\">\u201d <\/span><b>gap <\/b><span style=\"font-weight: 400;\">by incentivising both manufacturing scale and ownership of technology, intellectual property and brands.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The earlier PLI-LSEM helped establish India as a major manufacturing and export base.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The next challenge is to <\/span><b>deepen the ecosystem<\/b><span style=\"font-weight: 400;\"> so that more components, design capabilities, patents and economic value are generated domestically.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Two-Pronged Architecture<\/b><\/h2>\n<ul>\n<li aria-level=\"1\"><b>Scale-up of mobile manufacturing:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The first component targets mobile-phone manufacturers and Electronics Manufacturing Services (<\/span><b>EMS<\/b><span style=\"font-weight: 400;\">) companies.<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Applicant companies must be incorporated in India and have recorded at least \u20b910,000 crore turnover in FY 2025-26.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Existing brands must achieve incremental sales over a progressively rising threshold &#8211; \u20b95,000 crore in FY27, rising annually to \u20b925,000 crore in FY31.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">For a new brand, eligibility begins after achieving \u20b910,000 crore annual sales, followed by year-on-year incremental sales requirements.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">A moving baseline is used &#8211; baseline sales are the previous year&#8217;s domestic sales plus 15%. Incentives are calculated on sales exceeding this baseline.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-weight: 400;\">This design attempts to reward genuine incremental production rather than merely subsidising existing output.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Building Indian-owned mobile brands:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The second component represents the <\/span><b>more strategic shift<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The Government wants India not merely to manufacture smartphones for global companies but to develop Indian-owned brands comparable with leading international players.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">To qualify as an Indian brand, the company must meet conditions relating to &#8211;<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Incorporation in India;<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Indian ownership of trademark and intellectual property;<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Management control by Indian citizens;<\/span><\/li>\n<li><span style=\"font-weight: 400;\">More than 51% Indian ownership\/control; and<\/span><\/li>\n<li><span style=\"font-weight: 400;\">In-house design and R&amp;D capabilities in India.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-weight: 400;\">The Government is reportedly working with Indian companies to develop such brands, with the objective of bringing a strong indigenous product to market.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Incentive Structure<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme provides 2.25%\u20135% incentives on eligible sales, depending on the category.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Indian brands receive stronger support &#8211;<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>5% incentive<\/b><span style=\"font-weight: 400;\"> on eligible incremental sales;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Up to 1.5% additional incentive for domestic sourcing of key components and sub-assemblies;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Additional 3% incentive for Indian design and R&amp;D;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">A one-year gestation period is available to Indian brands; and<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Additional non-fiscal support may be provided through an empowered committee.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Thus, the incentive architecture deliberately links public support with domestic sourcing, innovation and intellectual-property creation, rather than focusing solely on production volumes.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>The Larger Economic Significance<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme reflects a <\/span><b>transition <\/b><span style=\"font-weight: 400;\">in India&#8217;s electronics strategy: Import substitution \u2192 domestic assembly \u2192 export-oriented manufacturing \u2192 domestic value addition \u2192 Indian technology, IP and brands.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Government aims to strengthen India&#8217;s position in Global Value Chains (<\/span><b>GVCs<\/b><span style=\"font-weight: 400;\">) while retaining a larger share of the economic value generated by the electronics sector.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India is already the <\/span><b>world&#8217;s second-largest<\/b><span style=\"font-weight: 400;\"> mobile-phone manufacturer by volume, while 99.2% of mobile phones used domestically are now made in India.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Smartphones also became India&#8217;s <\/span><b>largest <\/b><span style=\"font-weight: 400;\">individual exported product category in 2025.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Government estimates that MPMS &#8211;<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Could generate around \u20b939 lakh crore of cumulative production and about 60,000 direct <\/span><b>jobs<\/b><span style=\"font-weight: 400;\">,\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">While strengthening technological sovereignty and Indian patents in design and <\/span><b>R&amp;D<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Domestic value addition was around 23% in FY2023-24, highlighting the substantial scope for <\/span><b>deeper localisation<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Key Structural Challenges<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Component ecosystem<\/b><span style=\"font-weight: 400;\">: India remains dependent on imports for several high-value components and inputs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Technology gap<\/b><span style=\"font-weight: 400;\">: Manufacturing at scale does not automatically translate into ownership of core technologies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Global competition<\/b><span style=\"font-weight: 400;\">: Indian brands must compete with established firms possessing strong R&amp;D, supply chains, consumer loyalty and distribution networks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cost competitiveness<\/b><span style=\"font-weight: 400;\">: Higher domestic sourcing can initially raise production costs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Innovation ecosystem<\/b><span style=\"font-weight: 400;\">: Sustained investment in R&amp;D, semiconductor technology, design and skilled manpower is essential.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>MSME integration<\/b><span style=\"font-weight: 400;\">: Benefits should eventually reach smaller domestic component manufacturers rather than remaining concentrated among large firms.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Way Forward<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">MPMS should be <\/span><b>integrated <\/b><span style=\"font-weight: 400;\">with the India Semiconductor Mission, electronics-component ecosystem, skill development, R&amp;D incentives and trade policy.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Greater support <\/b><span style=\"font-weight: 400;\">for Indian design houses, startups and component manufacturers can help create an end-to-end electronics ecosystem.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The real measure of success should therefore be domestic value addition, rather than merely the number of smartphones assembled in India.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/how-smartphone-manufacturing-scheme-will-work-10844731\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Government has notified the \u20b962,500-crore Mobile Phone Manufacturing Scheme (MPMS) for five years from FY 2026-27 to FY 2030-31. <\/p>\n","protected":false},"author":19,"featured_media":120677,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[9736,21,22,23],"class_list":["post-120633","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-mains-current-affairs","tag-mobile-phone-manufacturing-scheme-mpms","tag-prelims-pointers","tag-upsc-current-affairs","tag-upsc-prelims-current-affairs","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/120633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=120633"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/120633\/revisions"}],"predecessor-version":[{"id":120676,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/120633\/revisions\/120676"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/120677"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=120633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=120633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=120633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}