1 week ago
India’s Rs 62,500-Crore Mobile Scheme Targets Brands and Scale
India has launched a large plan to make more mobile phones in the country.
The plan will last for five years and has two main tracks.
One track helps large companies make many phones and use more parts produced in India.
The other track helps Indian-owned companies create their own phone brands and technology.
These companies must keep their ownership, designs, trademarks and research work in India.
Companies can receive extra financial support when they sell eligible phones or buy important parts from Indian suppliers.
The government hopes the plan will create jobs, increase exports and keep more of the phone industry’s value in India.
It also wants India to move from mainly assembling foreign brands to developing Indian products and intellectual property.
India’s five-year Mobile Phone Manufacturing Scheme will run from FY 2026-27 to FY 2030-31 with an outlay of Rs 62,500 crore.
The government aims to support about Rs 39 lakh crore in mobile production, Rs 15 lakh crore in exports and 60,000 direct jobs.
One track supports large manufacturers and India-registered electronics manufacturing services companies, while another supports Indian-owned mobile brands.
Eligible Indian brands can receive a 5% sales incentive, an additional 3% for Indian design and R&D, and up to 1.5% for domestic sourcing.
The scheme requires Indian brands to maintain majority Indian ownership, Indian-held intellectual property and trademarks, and in-house design and R&D capabilities.
- Who
- The Government of India, large mobile-phone manufacturers, electronics manufacturing services companies and eligible Indian-owned mobile brands.
- What
- A Rs 62,500-crore Mobile Phone Manufacturing Scheme offering incentives for production, Indian brands, design, research and domestic sourcing.
- Where
- India, with the scheme intended to expand the country’s role in global electronics production and exports.
- When
- The scheme runs from FY 2026-27 through FY 2030-31; eligible Indian-brand applicants may receive a one-year gestation period.
- Why
- To sustain large-scale manufacturing after the earlier PLI scheme, increase domestic value addition and develop Indian-owned brands, technology and intellectual property.
Broader Manufacturing Participation
Stronger Indian Ownership
Participation by Chinese-linked brands
Broader Manufacturing Participation
Allowing Chinese-linked brands or their Indian EMS partners to participate when they demonstrate genuine investment, localisation and value addition could broaden manufacturing and investment.
Stronger Indian Ownership
Deeper relationships between Chinese brands and Indian EMS companies could extend Chinese control over the value chain, creating a policy concern.
How success should be measured
Broader Manufacturing Participation
Higher production, exports and manufacturing capacity would continue the scale-building achieved under the earlier smartphone PLI scheme.
Stronger Indian Ownership
The scheme should be judged by whether it creates Indian-owned brands with genuine intellectual property, design and product ownership rather than mainly increasing assembly.
Immediate scale versus domestic capability
Broader Manufacturing Participation
Supporting established global manufacturers and contract manufacturers can preserve large-scale production and strengthen India’s position in international supply chains.
Stronger Indian Ownership
Higher support for Indian brands, domestic design and research could help India capture more of the value generated by phones instead of relying mainly on foreign-owned products and technology.
Key facts
- Scheme outlay
- Rs 62,500 crore
- Duration
- Five financial years, from FY 2026-27 to FY 2030-31
- Government targets
- Approximately Rs 39 lakh crore in mobile production, Rs 15 lakh crore in exports and 60,000 direct jobs
- Large-manufacturer eligibility
- At least Rs 10,000 crore turnover in FY 2025-26, along with rising sales thresholds
- Indian-brand requirements
- Indian incorporation, more than 51% Indian shareholding, Indian management control, India-held intellectual property and trademarks, and in-house Indian design and R&D
- Indian-brand incentives
- 5% on eligible or incremental sales, plus 3% for Indian design and R&D
- Domestic sourcing incentive
- Up to 1.5%; qualifying components must be localised for at least 25% of an applicant’s annual phone production
- Incentive-rate discrepancy
- One article gives TS1 rates of 2.75% in 2027-28, 2.5% in 2029-30 and 2.25% in 2031, while another describes the range as 2.25% to 5%.
Quotes
Ashwini Vaishnaw
India’s Electronics and IT Minister
“Chinese brands have a significant share of the Indian market and increasingly operate through deeper commercial linkages with Indian EMS players. That creates a policy tension for the government: how does it capture the manufacturing and investment benefits of these relationships without allowing the scheme to become a backdoor for extending Chinese control over the value chain?”
indianexpress.com
“The new mobile phone manufacturing scheme builds on the central premise of PLI for smartphone makers: India will support manufacturers that can demonstrate scale and meaningful incremental production. Incumbents that have already built manufacturing capacity in India are therefore naturally positioned to benefit.”
indianexpress.com
Sources
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