India approves Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS) to boost exports and jobs

New Delhi: The union cabinet on Wednesday approved a Mobile Phone Manufacturing Scheme (MPMS) with an outlay of Rs 62,500 crore for a period of five years.

Union minister of electronics and information technology, Ashwani Vaishnaw in a cabinet briefing said the scheme will disburse incentives based on domestic sourcing, and design and R&D by Indian brands. The scheme will also have incentives for export of smartphones.

The scheme has a target to reach cumulative production of Rs 39 lakh crore during the tenure of the scheme, from Rs 22 lakh crore production achieved under the previous production-linked incentive (PLI) scheme, Vaishnaw said.


Also Read: Cabinet approves India Semiconductor Mission 2.0; earmarks Rs 1.27 lakh crore for the project

The scheme also has a target to reach Rs 15 lakh crore of mobile phone exports, which has become one of the top exported products from India. In the previous scheme, India exported smartphones worth Rs 7.5 lakh crore.

The scheme will be notified in another 20 days, the minister said. The MPMS scheme has a target to generate 60,000 direct jobs in mobile manufacturing and other sectors.

Vaishnaw said the aim of the scheme is to launch an Indian brand that can serve the global market. The scheme will also help promote technological sovereignty and build intellectual properties through patent creation, R&D and innovation, Vaishnaw said.

Also Read: Cabinet approves India Semiconductor Mission 2.0; earmarks Rs 1.27 lakh crore for the project

Extending the PLI scheme for handset, announced in 2020 was a key ask by mobile manufacturers such as Dixon Technologies, Foxconn and Tata Electronics.

Vaishnaw said under the previous scheme, Rs 19,090 crore was disbursed as incentives while the government collected Rs 25,000 crore in direct tax and Rs 3 lakh crore in GST from the smartphone industry.

Investment under the previous PLI scheme was Rs 20,587 crore, exceeding the target by three times. Smartphone production was Rs 11,61,581 crore during the tenure, exceeding the target by 142%. Exports also exceeded target by 132%, achieving Rs 6,43,323 crore during the scheme's tenure, Vaishnaw said.