New PLI puts Indian mobile brands in focus

Union Electronics and IT Minister Ashwini Vaishnaw said on Friday that three players had the potential to bring products to market in about 10-14 months under the Rs 62,500-crore Mobile Phone Manufacturing Scheme (MPMS), which was notified during the day. The government, he said, would be strict in screening companies seeking support as Indian brands and would not allow copycats to qualify. “The design has to be your own design. It cannot just be a copycat. They have to come up with the design and prove that the IP is their own,” Vaishnaw said. He added that the government had asked the three companies to develop designs that could compete with the best products in their respective segments.

The scheme makes a distinction between two objectives: strengthening India’s position as a large-scale mobile manufacturing base, including the manufacturing ecosystem of global brands, and creating Indian-owned mobile brands with their own intellectual property, design and R&D capabilities. Under target segment 1 (TS1), mobile phone manufacturers, including electronics manufacturing services (EMS) companies, registered in India with a minimum turnover of Rs 10,000 crore in FY26 will be eligible. Existing brands will have to achieve threshold sales of Rs 5,000 crore over their FY26 sales in FY27, rising progressively to Rs 25,000 crore by FY31. New brands will become eligible after achieving annual sales of Rs 10,000 crore in India.

The incentive structure under TS1 is linked to incremental sales. A portion of eligible sales will attract incentives of 2.75% in FY27 and FY28, tapering to 2.25% by FY31, while the remaining eligible sales will attract 5% in FY27 and FY28, declining to 4% by FY31. An additional incentive of up to 1.5% will be available for domestic sourcing of key components, subject to localisation conditions.

Target segment 2 (TS2), meanwhile, is specifically aimed at Indian mobile brands. To qualify, a brand must be incorporated in India, hold its IP and trademark in India, have management control with Indian citizens, and have more than 51% Indian ownership. It must also have in-house R&D and design capabilities in India. Mobile phone manufacturers, including EMS companies, seeking support under this segment will need a minimum FY26 turnover of Rs 1,000 crore, but there will be no minimum annual threshold-sales requirement for Indian brands.

The incentive available to Indian brands is higher and includes support specifically for product development. Eligible sales will attract a 5% incentive, with an additional 3% for Indian design and R&D and up to 1.5% for domestic sourcing, potentially taking the total support to 9.5% of eligible sales. The sourcing incentive covers display modules, camera modules, enclosures, batteries and USB cables, including connectors, and requires such components to be localised for at least 25% of the mobile phone units sold in a financial year.

“We had a mobile manufacturing ecosystem. But because of tax issues and Chinese onslaught, it became impossible for them to compete in the market. Now that we have been able to establish the ecosystem back in our country, time has come to focus on developing the Indian brand,” Vaishnaw said.

The scheme, which runs for five years from FY27 to FY31, has a budgetary outlay of Rs 62,500 crore, with the incentive allocation fungible between the two segments. The government expects it to nearly double cumulative mobile phone production to around Rs 39 lakh crore during its tenure and generate about 60,000 direct jobs. Electronics and IT Secretary S Krishnan said the objective was to build technological sovereignty, capture greater economic value and develop Indian products and intellectual property. Detailed implementation guidelines will be issued separately by MeitY, after which the application and selection process will begin.