New Delhi, Jul 15 (PTI) The Union Cabinet on Wednesday approved an outlay of Rs 62,500 crore for the Mobile Phone Manufacturing Scheme, aimed at building Indian brands to achieve technological sovereignty and further scale up local mobile production.

Addressing reporters after the Cabinet meeting, Union Minister Ashwini Vaishnaw said that the government expects the new incentive-linked scheme to lead to exports of around Rs 15 lakh crore and the generation of 60,000 new direct jobs.

"Cabinet has approved Rs 62,500 crore for mobile PLI 2.0," Vaishnaw said. The Mobile Phone Manufacturing Scheme (MPMS) will be spread over a period of five years from FY 2026-27 to FY 2030-31.

"There is a provision to make a mobile phone brand of India. There will be a separate project for Indian mobile phones," the minister said.

An official release stated that the MPMS scheme also aims to build Indian brands to achieve technological sovereignty, capture significant economic value, and create Indian patents in design and R&D.

"The scheme provides incentive support on eligible sales for manufacturing of mobile phones in India at differentiated rates ranging from 2.25 per cent to 5 per cent. Scheme also provides additional incentive of up to 1.5 per cent linked to domestic sourcing of key components/ sub-assemblies. For building Indian brands, an additional incentive @3 per cent on Eligible Sales for design and R&D of the product," the release said.

During the scheme tenure, the cumulative mobile phone production in the country is expected to reach approximately Rs 39 lakh crore with significant increase in exports of mobile phones. The Scheme is also expected to generate around 60,000 direct jobs thereby contributing to economic growth, employment generation and strengthening India’s position in global electronics manufacturing hub, the government said.

Smartphones have emerged as India's top exported commodity in CY 2025, surpassing traditional leading export items such as diesel fuel and cut diamonds. The country exported smartphones worth Rs 2.62 lakh crore, with iPhone maker Apple dominating the segment.

Earlier, the government introduced the Production Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI-LSEM) to boost mobile manufacturing and exports. The tenure of PLI-LSEM ended on 31st March 2026.

Under the PLI 1.0 scheme, approximately 125 crore mobile phones were produced in the country.

"Incentives of Rs 19,000 crore were given under PLI 1.0, and total direct tax collected was Rs 25,000 crore," Vaishnaw said.

Following a push to mobile phone production, India has emerged as the second-largest mobile manufacturer in the world. The mobile phone production in the country more than doubled to Rs. 5.5 lakh crores in FY 2024-25, from Rs 2.14 lakh crores in FY 2019-20.

Mobile phone exports have increased by around eightfold, from Rs 0.27 lakh crore in FY 2019-20 to Rs 2 lakh crore in FY 2024-25.

From being an importer of mobile phones back in 2014, India has now become a net exporter, with more than 300 mobile manufacturing units being operational in the country. PTI PRS MR

Mobile phone manufacturing incentives link eligible sales, domestic sourcing, design and research support to indigenous brands and expanded production. The Mobile Phone Manufacturing Scheme establishes a five-year incentive-linked framework for manufacturing mobile phones in India. It provides differentiated incentive support on eligible sales, additional support for domestic sourcing of key components and sub-assemblies, and a further incentive for product design and research and development aimed at building Indian brands. The scheme seeks to expand domestic production and exports, promote technological sovereignty, create patents, support employment, and strengthen domestic value capture in mobile-phone manufacturing.