India is already a major player in the smartphone world, currently ranking as the second-largest exporter globally. However, most of this success comes from simply assembling imported parts. To change this, the government has launched the Mobile Phone Manufacturing Scheme (MPMS) with a budget of ₹62,500 crore over the next five years to encourage true local manufacturing.
Moving Beyond Simple Assembly
Right now, a phone labeled “Made in India” might still be built mostly with foreign components. This means the actual profit staying in the country is quite small compared to the price of the phone.
The new MPMS focuses heavily on value addition.
The ultimate goal is to design the technology, create the software, and build the physical parts locally.
This approach ensures the country keeps a much larger share of the economic benefits.
How the New Scheme Rewards Companies
The massive budget will be given out as cash incentives based on strict performance rules, targeting two main areas:
Scaling Up Big Factories: Massive global manufacturers can earn financial rewards if they hit enormous sales targets, starting at ₹10,000 crore.
Supporting Local Creators: The scheme heavily favors homegrown businesses by offering a baseline 5% reward just for being an eligible Indian brand.
Design Bonuses: Companies receive an extra 3% financial boost if the phone’s research, development, and design are done entirely in India.
Rules for True Indian Ownership
To make sure foreign companies don’t just set up fake local offices to claim these rewards, the government has outlined strict rules for what counts as a true “Indian brand.”
The company must be at least 51% owned by Indian citizens.
The brand’s leadership, trademarks, and intellectual property must stay within the country.
Companies get an additional 1.5% reward if at least 25% of the phone’s physical parts (like batteries, cameras, and screens) are sourced locally.
This ambitious plan is expected to create around 60,000 direct jobs and build a fully independent technology ecosystem in India.
Are you curious about how this new scheme might affect the prices of smartphones in the coming years?