Mobile Phone Manufacturing Scheme (MPMS)

 Why in News?
The Union Ministry of Electronics and Information Technology (MeitY) has notified the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of ₹62,500 crore to strengthen India’s mobile manufacturing ecosystem and enhance its global competitiveness.

Key Points:

• The scheme aims to:
  • Increase the scale of mobile phone manufacturing.
  • Deepen the domestic supply chain through higher Domestic Value Addition (DVA).
  • Strengthen domestic manufacturing capabilities.
  • Promote technological sovereignty among Indian mobile brands.
  • Encourage Indian patents, design and R&D.
  • Generate employment and increase India’s share in global value chains.
• The scheme will operate for 5 years, from FY 2026-27 to FY 2030-31.
• It has two target segments:
  • Target Segment 1 (TS1): Incentivising mobile phone manufacturing.
  • Target Segment 2 (TS2): Supporting Indian mobile phone brands.

Incentives:

• TS1: Differentiated incentives ranging from 2.25% to 5%.
• TS2: 5% incentive for Indian brands, with an additional 3% incentive for Indian design and R&D.
• TS2 also provides non-fiscal support to Indian brands.
• Applicants under TS2 may receive a one-year gestation period.

Eligibility under TS1:

• Open to mobile phone manufacturers, including Electronics Manufacturing Services (EMS) companies registered in India.
• Minimum turnover of ₹10,000 crore in FY 2025-26.
• Existing brands must achieve an annual threshold of ₹5,000 crore over and above their FY 2025-26 sales.
• New brands become eligible after achieving ₹10,000 crore annual sales in India, followed by the prescribed year-on-year ₹5,000 crore threshold.

Eligibility under TS2:

• Minimum turnover of ₹1,000 crore in FY 2025-26.
• The company must qualify as an Indian Brand, including:
  • Registered/incorporated in India.
  • IP and trademarks held in India.
  • Management control with Indian citizens.
  • More than 51% shareholding is held by Indian citizens.
  • In-house R&D and design capabilities in India.

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