Cabinet approves Mobile Phone Manufacturing Scheme (MPMS)

📌 Summary:

• Union Cabinet approved the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore, succeeding the PLI-LSEM scheme whose tenure ended on 31 March 2026
• Scheme tenure: 5 years (FY 2026-27 to FY 2030-31); provides incentive on eligible sales at differentiated rates of 2.25% to 5%
• Additional incentive of up to 1.5% linked to domestic sourcing of key components/sub-assemblies, plus 3% extra on eligible sales for design and R&D to build Indian brands
• Aims to deepen domestic value addition, strengthen supply-chain resilience, achieve technological sovereignty and create Indian patents in design/R&D
• Expected outcomes: cumulative mobile phone production of ~Rs 39,00,000 crore and ~60,000 direct jobs
• Context: since FY 2014-15, electronics manufacturing grew 7x and exports 11x; India is the world's 2nd-largest mobile phone manufacturer by volume, with 99.2% of phones used in India made domestically; smartphones became India's single largest exported product category in 2025

🎯 UPSC Relevance: GS3 — Indian Economy (industrial policy, manufacturing, value addition, employment generation, global value chains)

📝 Prelims Facts:

• MPMS outlay: Rs 62,500 crore; tenure FY 2026-27 to FY 2030-31
• Incentive range: 2.25%–5%; +1.5% for domestic sourcing; +3% for design/R&D
• India is the world's 2nd-largest mobile phone manufacturer by volume
• Predecessor: PLI-LSEM (Large Scale Electronics Manufacturing), ended 31 March 2026

🔑 Key Term: Domestic Value Addition — the share of a product's value created within India, a key measure of manufacturing self-reliance.