India's Mobile Phone Manufacturing Scheme Strengthens Electronics Manufacturing and Greenfield Investment Opportunities

July 30, 2026

In July 2026, the Union Cabinet approved the Mobile Phone Manufacturing Scheme (MPMS) with an outlay of INR 62,500 crore, the successor to the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), which formally concluded on March 31, 2026.

The new scheme will run for five financial years, from FY2026-27 to FY2030-31, and targets cumulative mobile phone production worth roughly INR 39 lakh crore over its tenure, alongside an estimated 60,000 direct jobs. The approval lands at a moment of genuine momentum for the sector: smartphones became India's single largest export product by value in calendar year 2025, and mobile phone exports have grown from around INR 1,500 crore in 2014-15 to nearly INR 2.59 lakh crore in 2025-26.

For manufacturers and global electronics majors evaluating new capacity, India's mobile phone manufacturing scheme is a signal that the government intends to deepen, not just extend, the country's electronics manufacturing ecosystem.

What India's Mobile Phone Manufacturing Scheme Includes

The scheme's incentive structure is more differentiated than its predecessor. Manufacturers will receive incentive support ranging from 2.25% to 5% on eligible sales of mobile phones manufactured in India, with an additional incentive of up to 1.5% specifically for increased domestic sourcing of key components and sub-assemblies. A further 3% incentive on eligible sales is available to companies that invest in product design, research and development, and the building of Indian-owned brands.

This structure marks a deliberate policy shift: where PLI-LSEM was largely calibrated to attract assembly-stage investment, the new mobile phone manufacturing scheme is explicitly designed to pull manufacturers further up the value chain, from final assembly toward components, design, and intellectual property.

According to the Ministry of Electronics and Information Technology (MeitY), the scheme builds directly on a programme that, by its own account, exceeded its investment, production, and export targets, though domestic value addition in mobile phones has trailed the original 35-40% ambition, with wider electronics value addition estimated at only 18-20% as of 2026, precisely the gap the new incentive weighting is designed to close.

How the Scheme Strengthens Electronics Manufacturing in India

The mobile phone manufacturing scheme does not operate in isolation. It sits alongside the Electronics Components Manufacturing Scheme (ECMS), which covers PCBs, passive components, electro-mechanical parts, sub-assemblies, camera modules, and capital goods, and which saw its outlay increased from INR 22,919 crore to INR 40,000 crore in the 2026 Budget after a strong industry response. In its third tranche, approved in early January 2026, the government cleared 22 new proposals worth INR 41,863 crore in investment and a projected INR 2,58,152 crore in production, expected to generate close to 33,791 direct jobs across eight states.

Foxconn, Dixon Technologies, Tata Electronics, Samsung Display, and Hindalco Industries were among the approved applicants, with projects spanning mobile phone enclosures, PCB assembly, display modules, and aluminium extrusion.

Alongside MPMS, the Union Cabinet also approved Semicon 2.0, backed by an additional INR 1.27 lakh crore for semiconductor manufacturing. Together, these initiatives reinforce the government's strategy of strengthening India's electronics manufacturing ecosystem by developing chips, components, and final assembly capabilities in parallel rather than sequentially.

How It Encourages Greenfield Electronics Manufacturing Investment

The scheme's structure and the ECMS approvals that accompany it are already translating into ground-level greenfield electronics manufacturing activity. Foxconn's expansion at Devanahalli near Bengaluru, spread across nearly 300 acres with an investment of around INR 20,000 crore, is designed to be among the company's largest facilities in India, targeting close to 20 million iPhone units a year and employment of 50,000 workers, with women making up roughly 80% of the workforce.

Tata Electronics, which became the first Indian company to manufacture iPhones after acquiring Wistron's India operations, is expanding its own enclosure manufacturing capacity in Tamil Nadu, creating significant number of jobs. Foxconn's Yuzhan Technology India project, also in Tamil Nadu, is expected to create several jobs focused on mobile phone enclosure production.

The deliberate spread of ECMS-approved projects across eight states, rather than concentration in one or two established hubs, indicates that mobile phone manufacturing expansion is now extending industrial investment in electronics into newer geographies alongside Tamil Nadu and Karnataka's mature clusters.

Which Companies and Industries Are Expected to Benefit

The most direct beneficiaries are the large contract manufacturers and electronics manufacturing services (EMS) providers already anchoring India's mobile ecosystem, Foxconn, Tata Electronics, Dixon Technologies, and Samsung, alongside brand owners building India-based production and, increasingly, India-based design capability.

The component tier stands to gain proportionally more under this scheme's design than under PLI-LSEM: companies making PCBs, camera modules, connectors, batteries, and mechanical enclosures, names such as Motherson Electronic Components, ATL Battery Technology India, TDK India, AT&S India, and Epitome Components have already secured ECMS approvals, are positioned to capture the additional 1.5% domestic-sourcing incentive that rewards manufacturers who source these very components locally.

IT hardware and laptop and server manufacturers, covered under the parallel PLI 2.0 for IT hardware, and semiconductor packaging and testing companies benefiting from Semicon 2.0, complete a manufacturing ecosystem that is increasingly interdependent: a mobile phone manufacturing plant's incentive economics now depend partly on how much of its component supply chain also exists inside India.

What Manufacturers Should Consider Before Establishing New Facilities

A scheme with strong incentive economics still requires a facility that can be designed, approved, built, and commissioned to the tolerances electronics manufacturing demands, and that work sits outside the scope of any government notification.

A feasibility study for a new mobile phone assembly plant or component facility needs to weigh state-level ECMS and state industrial policy incentives against site-specific factors: proximity to an existing component supply base, port and airport connectivity for both imported sub-assemblies and finished-goods exports, power quality and redundancy suited to precision electronics manufacturing, and skilled labour availability in the chosen cluster.

Plant design and engineering for an electronics manufacturing plant differ meaningfully from general industrial construction. SMT lines, PCB assembly areas, and cleanroom-grade enclosure or camera-module production require controlled environments, temperature, humidity, and particulate control, engineered into the building from the layout stage, along with electrostatic discharge protection, precision material handling, and utility systems (compressed air, chilled water, backup power) sized for continuous, high-precision operation.

Regulatory approvals, environmental clearance, factory licensing, electronics-sector-specific import and export documentation for capital equipment, and compliance with the eligibility conditions attached to MPMS and ECMS disbursement, must be sequenced correctly against construction and equipment procurement, since a misstep in scheme eligibility documentation can affect the incentive stream a project was underwritten against.

This is where coordinated EPCM consulting, covering site selection, detailed engineering, procurement management, and construction supervision as one integrated workstream, determines whether a facility is ready to produce at the volume and quality level its incentive case assumed, on the timeline the scheme's five-year window allows.

Mobile phones became India's largest export category in 2025, and the government has now backed the next stage with INR 62,500 crore in incentives through 2031. Turning that incentive design into a functioning assembly line, engineered, approved, and commissioned on schedule, is the work that will determine how much of that INR 39 lakh crore production target India's manufacturers actually capture.

IMARC Engineering’s Perspective

India's mobile phone manufacturing scheme, layered on top of the ECMS component ecosystem and Semicon 2.0, represents the most structurally ambitious phase yet of the country's electronics manufacturing build-out, and the early investment activity, from Foxconn's Devanahalli expansion to the geographically dispersed ECMS approvals, shows manufacturers are responding quickly. From an engineering perspective, this marks the stage where project execution becomes the differentiator between companies that maximise the scheme's benefits and those that face delays.

A differentiated incentive structure rewarding domestic sourcing and R&D does not by itself produce a functioning PCB assembly line or a qualified cleanroom enclosure facility. That requires feasibility studies grounded in the realities of each state's incentive framework and supply base, site selection that accounts for component-cluster proximity and utility readiness, precision plant design for SMT and assembly operations, and EPCM project management that keeps regulatory approvals, procurement, and construction moving in parallel rather than in sequence.

At IMARC Engineering, we support electronics manufacturers and EMS providers planning greenfield electronics manufacturing facilities in India, from mobile phone assembly plants to PCB and component manufacturing units, with the full engineering and project development capability needed to convert a scheme approval into a commissioned, export-ready plant.

As India's electronics manufacturing ecosystem continues to deepen under MPMS and ECMS, the companies that plan their facilities with the same rigour the government has put into the incentive design will be the ones that capture this opportunity fully.