The Indian government has approved a new incentive scheme to keep the country's smartphone manufacturing momentum going. The decision comes just a few months after the Production Linked Incentive (PLI) scheme for Large Scale Electronics Manufacturing (LSEM) ended on March 31.
ALSO READ: Are X And YouTube Directing Millions Of Users To Nudify Apps? What New Study Reveals
On Wednesday, the Union Cabinet cleared the Mobile Phone Manufacturing Scheme, which has a total outlay of Rs. 62,500 crore. This plan has been designed to help increase the manufacturing of mobile phones in India, which would lead to adding more value locally and help improve the country's supply chain. This plan will become operative only after the government issues a formal notification.
As per the statement of the Ministry of Electronics and Information Technology (MeitY), the new plan will not only help make India's smartphone manufacturing industry competitive globally but also encourage the manufacture of smartphones in the country.
The scheme will remain in force for five years, from FY 2026-27 to FY 2030-31.
Manufacturers will receive incentives based on eligible sales made in India. The incentive rate will range from 2.25 percent to 5 percent, depending on the category they qualify under. Companies that increase local sourcing of components can receive an additional incentive of up to 1.5 percent.
The government has also introduced a separate incentive for Indian smartphone brands. Domestic companies carrying out design and research and development work in India will be eligible for an additional 3 percent incentive on eligible sales.
MeitY said the scheme is expected to help Indian brands scale their businesses while encouraging more design and innovation within the country. The government also believes it will strengthen India's position in the global smartphone supply chain.
During the five-year period, the Centre estimates that the scheme will create around 60,000 direct jobs. It also expects India's handset manufacturing output to reach Rs. 39,00,000 crore, alongside a further rise in smartphone exports.
The new scheme replaces the PLI-LSEM programme, which was introduced under the government's Make in India initiative. That scheme supported companies including Apple and Samsung and played a major role in boosting smartphone production and exports from India. With the Mobile Phone Manufacturing Scheme, the government is now looking to build on that progress and push the industry into its next phase of growth.