Cabinet clears new Rs 62,500 crore mobile manufacturing scheme, Indian-brand phones to get fresh push

3 min readNew DelhiUpdated: Jul 15, 2026 06:38 PM IST

Along the lines of the sales-linked incentives under the PLI for smartphones, the fresh scheme provides incentive support on eligible sales for manufacturing of mobile phones in India at differentiated rates ranging from 2.25% to 5%. (File photo)

The Union Cabinet has approved a Rs 62,500 crore mobile phone manufacturing scheme, as a follow on of the Production Linked Incentive (PLI) scheme for smartphone assembly, which helped India successfully localise mobile phone production. The scheme will be in force for a period of five years.

The PLI scheme was instrumental in attracting companies such as Apple to set up local production facilities through their contract manufacturing partners, and establishing smartphones as one of the country’s biggest export categories. Thanks to the scheme, India has managed to take local value addition in the sector to 24%, compared to China’s rate of 38%.

Under the fresh scheme, the government has placed a key focus on local sourcing to help domestic value addition, and design and R&D by Indian brands, along with incentives linked to export of smartphones, Union IT Minister Ashwini Vaishnaw said.

Along the lines of the sales-linked incentives under the PLI for smartphones, the fresh scheme provides incentive support on eligible sales for manufacturing of mobile phones in India at differentiated rates ranging from 2.25% to 5%.

The scheme will also provide additional incentive of up to 1.5% linked to domestic sourcing of key components/sub-assemblies. For building Indian brands, an additional incentive at the rate or 3% on eligible sales for design and R&D of the product.

Jobs, production and global value chains

The scheme targets to reach cumulative production of Rs 39 lakh crore during the tenure of the scheme, from Rs 22 lakh crore production achieved under the previous PLI scheme. The scheme has a target to generate 60,000 direct jobs in mobile manufacturing and other sectors. Under the PLI scheme for smartphones, nearly 2 lakh jobs were created.

Vaishnaw said that under the PLI scheme, over Rs 19,000 crore was disbursed as incentives, and the government collected direct taxes worth Rs 25,000 crore, and Rs 3 lakh crore in GST from the smartphone industry.

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Investments under the previous scheme topped Rs 20,000 crore, exceeding the initial targets by three times. Smartphone production stood at Rs 11,61,581 crore, exceeding the target by 142%.

“Our vision is to have India’s share of global mobile phone production to 35-40%, and this policy will be a step towards that. The resulting scale will strengthen India’s position in global value chains and build technological know-how, advanced manufacturing processes, engineering capabilities, and supplier networks. These capabilities will extend beyond mobile phones and accelerate growth across the wider electronics industry,” said Pankaj Mohindroo, Chairman of tech industry body ICEA.

Soumyarendra Barik is a Special Correspondent with The Indian Express, specializing in the complex and evolving intersection of technology, policy, and society. With over five years of newsroom experience, he is a key voice in documenting how digital transformations impact the daily lives of Indian citizens.

Expertise & Focus Areas Barik’s reporting delves into the regulatory and human aspects of the tech world. His core areas of focus include:

The Gig Economy: He extensively covers the rights and working conditions of gig workers in India.

Tech Policy & Regulation: Analysis of policy interventions that impact Big Tech companies and the broader digital ecosystem.

Digital Rights: Reporting on data privacy, internet freedom, and India's prevalent digital divide.

Authoritativeness & On-Ground Reporting: Barik is known for his immersive and data-driven approach to journalism. A notable example of his commitment to authentic storytelling involves him tailing a food delivery worker for over 12 hours. This investigative piece quantified the meager earnings and physical toll involved in the profession, providing a verified, ground-level perspective often missing in tech reporting.

Personal Interests Outside of the newsroom, Soumyarendra is a self-confessed nerd about horology (watches), follows Formula 1 racing closely, and is an avid football fan.

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