Overview: The Ministry of Electronics and Information Technology has officially unveiled the Mobile Phone Manufacturing Scheme (MPMS), a decisive move designed to firmly cement India’s status as a global electronics powerhouse. Backed by a substantial budgetary outlay of ₹62,500 crore, this five-year initiative spans from FY 2026-27 through to 2030-31. At its core, the programme delivers highly lucrative production-linked incentives (PLI) to both global electronics manufacturing services (EMS) and emerging domestic brands.
Introduction: The New Era of Indian Exports
Smartphones have recently eclipsed refined fuels and diamonds to become India’s premier export commodity. To sustain this remarkable trajectory and deepen the domestic supply chain, the government introduced the MPMS. The primary goal is twofold: scale up existing production capabilities and aggressively nurture home-grown technology champions.
By actively rewarding incremental sales, domestic value addition, and local intellectual property (IP) creation, the MPMS is strategically positioned to boost export competitiveness whilst generating massive employment opportunities nationwide.
To ensure targeted growth, the framework splits beneficiaries into two distinct categories:
- Target Segment 1 (TS1): Tailored for large-scale global manufacturers and established EMS providers.
- Target Segment 2 (TS2): Exclusively dedicated to supporting Indian mobile phone brands through specialised fiscal and non-fiscal backing.
Core Guidelines and Fiscal Incentives
Understanding the eligibility criteria and incentive structures is vital for businesses looking to capitalise on the scheme.
1. TS1 (Global Manufacturers & EMS)
- Eligibility Threshold: Requires a baseline turnover of ₹10,000 crore for FY26.
- Incentive Structure: Participants can earn between 2.25% and 5% on eligible incremental sales, calculated over moving annual baselines.
2. TS2 (Domestic Indian Brands)
- Eligibility Threshold: Demands a much lower base turnover of ₹1,000 crore. Crucially, companies must maintain greater than 51% Indian citizen shareholding and possess local IP rights.
- Incentive Structure: Offers a highly attractive flat 5% incentive on eligible sales, without the burden of a minimum sales threshold.
3. The Localisation Boost
Manufacturers can secure an extra edge through domestic sourcing. The government is offering up to a 1.5% additional bonus for companies that locally source key sub-assemblies—specifically displays, batteries, and camera modules.
4. R&D and Design Push
Innovation pays off. Under TS2, Indian-designed products qualify for a special 3% additional bonus, rewarding brands that invest heavily in in-house research and development capabilities.
Frequently Asked Questions
What is the overall tenure of the MPMS programme?
Are Indian brands eligible to claim R&D benefits?
How SetIndiabiz Can Support Your Journey
Navigating the regulatory complexities of MPMS compliance requires more than just a quick read — it demands a robust, strategic approach. This is exactly where SetIndiabiz steps in.
Our team provides premier legal and financial business advisory in India, helping you seamlessly handle initial OEM registration and business compliance. We assist Indian and overseas founders with proper entity structuring and IP management to perfectly align with TS2 criteria. Furthermore, our compliance experts take the hassle out of your hands by meticulously filing your quarterly incentive claims with the scheme’s Project Management Agency (PMA), ensuring your business never misses out on its rightful financial rewards.
The MPMS 2026 represents a transformative leap forward for India’s thriving electronics ecosystem. Whether you are a global EMS giant looking to expand your footprint, or a visionary Indian founder building the next major smartphone brand, acting early is crucial. Stay fully compliant, leverage these unprecedented fiscal incentives, and accelerate your manufacturing journey in India today.
In This Article
Author Bio
Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.
