Why in News
🗞️ Why in News
On July 15, 2026, the Union Cabinet approved the Mobile Phone Manufacturing Scheme (MPMS) with an outlay of Rs 62,500 crore, running from FY2026-27 to FY2030-31. Administered by the Ministry of Electronics and Information Technology (MeitY), it succeeds the mobile-phone Production Linked Incentive (PLI) scheme and marks a deliberate pivot from final assembly toward domestic component and sub-assembly value addition.
India has, in less than a decade, moved from being a marginal importer-assembler of handsets to the world’s second-largest mobile phone manufacturer. Yet the story carries an uncomfortable footnote: a large share of the value inside every “Made in India” phone, the display, the camera module, the printed circuit board, the connectors and the mechanics, is still imported, much of it from China. The MPMS is the government’s answer to the recurring critique that India has mastered “Assemble in India” but not yet “Make in India”. It seeks to pull the electronics story deeper into the value chain, where the real margins, jobs and technology reside.
From PLI 1.0 to a Component Ecosystem
The original mobile-phone PLI, launched in 2020, was spectacularly successful at one thing: making India an assembly hub. Global majors set up lines, exports crossed record levels, and the trade profile of electronics improved sharply. But assembly captures only a thin slice of the final value. The MPMS consciously rebalances the incentive structure toward component and sub-assembly manufacturing, so that a rising share of the bill of materials is sourced and built domestically. This is measured through Domestic Value Addition (DVA), the metric that tells us how much of a product’s worth is genuinely created within India rather than merely screwed together here.
Targets and Ambition
The scheme is explicitly outcome-linked rather than input-subsidised, tying incentives to production and value-addition milestones over its five-year window.
| Parameter | Detail |
|---|---|
| Scheme name | Mobile Phone Manufacturing Scheme (MPMS) |
| Approval | Union Cabinet, July 15, 2026 |
| Outlay | Rs 62,500 crore |
| Tenure | FY2026-27 to FY2030-31 (five years) |
| Administering ministry | MeitY |
| Cumulative production target | ~Rs 39 lakh crore over five years |
| Direct jobs target | ~60,000 |
| Predecessor | Mobile-phone PLI scheme |
| Focus shift | Assembly to component and sub-assembly value addition |
The Trade-Deficit and Jobs Debate
Two anxieties drive the policy. First, import dependence: even as finished-phone imports have collapsed, imports of components, especially from China, have swelled, keeping the electronics trade balance fragile. Deepening the component base is therefore as much a strategic autonomy goal as an economic one. Second, quality employment: component fabrication, unlike screwdriver assembly, demands engineers, precision-tooling operators and process specialists, promising more durable, higher-skill jobs than the assembly lines alone.
The MPMS should be read alongside Semicon 2.0, the semiconductor mission cleared the same day. Together they signal a two-track push: chips at the deepest layer of the stack, and mobile components in the middle. Semiconductors and phone components are distinct interventions, but they converge on the same objective, an integrated, self-reliant electronics manufacturing base.
UPSC Relevance
GS Paper 3: Indian economy, mobilisation of resources, growth and employment; effects of liberalisation on the economy, changes in industrial policy; manufacturing and Make in India.
Prelims pointers:
- MPMS outlay: Rs 62,500 crore; tenure FY2026-27 to FY2030-31; nodal ministry MeitY.
- India is the world’s second-largest mobile phone manufacturer.
- MPMS is the successor to the mobile-phone PLI scheme, focusing on component and sub-assembly value addition.
- Domestic Value Addition (DVA) is the key metric; Semicon 2.0 was approved the same day.
Mains question: “India has succeeded at assembling mobile phones but not yet at manufacturing their components.” Critically examine how the Mobile Phone Manufacturing Scheme (MPMS) seeks to deepen domestic value addition, and assess the challenges to achieving genuine self-reliance in electronics. (15 marks, 250 words)
Facts Corner
📌 Facts Corner, Knowledgepedia
- MPMS outlay: Rs 62,500 crore over five years (FY2026-27 to FY2030-31).
- Nodal ministry: MeitY (Ministry of Electronics and Information Technology).
- Production target: ~Rs 39 lakh crore cumulative; jobs target: ~60,000 direct.
- Rank: India is the world’s second-largest mobile phone manufacturer.
- Core shift: from final assembly (PLI 1.0) to component and sub-assembly value addition, raising Domestic Value Addition (DVA).
- Related: Semicon 2.0 (semiconductor mission) was approved by the Cabinet on the same day, July 15, 2026.
- Debate: “Make in India vs Assemble in India”; component import-dependence on China; electronics trade deficit.
Sources: Press Information Bureau (PIB), MeitY, The Hindu, Indian Express, LiveMint
Source: Mobile Phone Manufacturing Scheme: Deepening India's Electronics Value Chain — Ujiyari.com | Free UPSC & State PCS Current Affairs
