{"id":368318,"date":"2026-07-27T20:51:06","date_gmt":"2026-07-27T15:21:06","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=368318"},"modified":"2026-07-27T20:51:06","modified_gmt":"2026-07-27T15:21:06","slug":"indias-mobile-phone-manufacturing-story","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/indias-mobile-phone-manufacturing-story\/","title":{"rendered":"India\u2019s Mobile Phone Manufacturing Story"},"content":{"rendered":"

Source<\/strong>: The post \u201cIndia\u2019s Mobile Phone Manufacturing Story\u201d has been created based on “Factory reset\u201d published in \u201cBusiness Line\u201d on 27th July 2026.<\/p>\n

UPSC Syllabus: <\/strong>GS-3 – Economy<\/p>\n

Context<\/strong>: India’s mobile phone manufacturing sector has witnessed remarkable growth under the Production Linked Incentive (PLI) scheme. However, domestic value addition has remained low because most high-value components are still imported. The new \u20b962,500-crore Mobile Phone Manufacturing Scheme (MPMS)<\/strong> aims to increase localization, promote component manufacturing, and strengthen India’s position in the global electronics value chain.<\/p>\n

Achievements of India’s Mobile Phone Manufacturing Sector<\/strong><\/h2>\n
    \n
  1. India has increased the number of mobile phone manufacturing units from 2 in 2014 to more than 300<\/strong> today.<\/li>\n
  2. Mobile phone production has grown from \u20b918,000 crore to nearly \u20b95.5 lakh crore<\/strong>.<\/li>\n
  3. India now produces around 325\u2013330 million mobile handsets annually<\/strong>.<\/li>\n
  4. Domestic manufacturing now meets almost the entire demand for mobile phones<\/strong> in the country.<\/li>\n
  5. Mobile phone exports have increased from \u20b91,566 crore to over \u20b92.6 lakh crore<\/strong>, making smartphones one of India’s fastest-growing export categories.<\/li>\n
  6. The PLI scheme has played a major role<\/strong> in transforming India into a global mobile phone assembly hub.<\/li>\n<\/ol>\n

    Limitations of the PLI Scheme<\/strong><\/h2>\n
      \n
    1. India has largely specialized in the assembly of mobile phones rather than manufacturing high-value components<\/strong>.<\/li>\n
    2. Most components such as chipsets, displays, camera modules, printed circuit boards, and other electronic parts<\/strong> continue to be imported.<\/li>\n
    3. Domestic value addition has remained around 20%<\/strong>, despite the rapid growth in production.<\/li>\n
    4. India’s electronics import bill has crossed $110 billion in FY26<\/strong> because of continued dependence on imported components.<\/li>\n
    5. The PLI scheme mainly rewarded incremental production instead of encouraging deeper localization<\/strong>.<\/li>\n<\/ol>\n

      Ways in which the Mobile Phone Manufacturing Scheme (MPMS) Improves Upon PLI<\/strong><\/h2>\n
        \n
      1. The MPMS shifts the policy focus from increasing production to enhancing domestic value addition<\/strong>.<\/li>\n
      2. Manufacturers will receive incentives ranging from 2.25% to 5% on eligible sales<\/strong>.<\/li>\n
      3. The scheme provides additional incentives for sourcing components and sub-assemblies from domestic manufacturers<\/strong>.<\/li>\n
      4. Companies investing in product design and research and development (R&D)<\/strong> will receive extra incentives.<\/li>\n
      5. The scheme encourages India to become a center for innovation as well as manufacturing<\/strong>.<\/li>\n<\/ol>\n

        The Mobile Phone Manufacturing Scheme Has Been Introduced at an Opportune Time<\/strong><\/h2>\n
          \n
        1. Global supply chains have changed because of the COVID-19 pandemic, geopolitical tensions, and trade restrictions<\/strong>.<\/li>\n
        2. Many multinational companies are adopting China+1 and friend-shoring strategies<\/strong> to diversify their manufacturing bases.<\/li>\n
        3. India has already emerged as a preferred destination for final assembly of mobile phones<\/strong>.<\/li>\n
        4. The next stage of growth requires the development of a strong domestic supplier ecosystem<\/strong>.<\/li>\n<\/ol>\n

          Role of MPMS Along with ISM 2.0<\/strong><\/h2>\n
            \n
          1. The MPMS will complement the proposed \u20b91.25 lakh crore India Semiconductor Mission (ISM) 2.0<\/strong>.<\/li>\n
          2. Both initiatives aim to promote component manufacturing along with handset production<\/strong>.<\/li>\n
          3. These initiatives can significantly reduce India’s dependence on imported electronic components<\/strong>.<\/li>\n<\/ol>\n

            Challenges Ahead<\/strong><\/h2>\n
              \n
            1. Financial incentives alone cannot create a globally competitive electronics manufacturing ecosystem.<\/li>\n
            2. Component manufacturing requires reliable infrastructure<\/strong> for efficient production.<\/li>\n
            3. The sector also requires affordable logistics<\/strong> to reduce production costs.<\/li>\n
            4. India needs to develop a skilled workforce<\/strong> to support advanced manufacturing.<\/li>\n
            5. A predictable regulatory environment<\/strong> is essential to attract long-term investments.<\/li>\n
            6. Private companies must view these schemes as an opportunity for long-term investment rather than short-term subsidies<\/strong>.<\/li>\n<\/ol>\n

              Lesson from India’s Automobile Industry<\/strong><\/h2>\n
                \n
              1. India’s automobile industry became globally competitive because it developed strong supplier networks around manufacturing clusters<\/strong>.<\/li>\n
              2. The mobile phone industry must also build a dense domestic supplier ecosystem<\/strong> to move beyond assembly and increase value addition.<\/li>\n<\/ol>\n

                Way Forward<\/strong><\/h2>\n
                  \n
                1. Ensure the effective implementation of MPMS and ISM 2.0 to strengthen the electronics ecosystem.<\/li>\n
                2. Promote domestic manufacturing of high-value components to increase value addition.<\/li>\n
                3. Improve infrastructure, logistics, and power supply to enhance competitiveness.<\/li>\n
                4. Strengthen skill development for advanced electronics manufacturing.<\/li>\n
                5. Maintain a stable and predictable regulatory environment to attract long-term investments.<\/li>\n
                6. Encourage R&D and product design to transform India into an innovation-driven manufacturing hub.<\/li>\n
                7. Develop manufacturing clusters with strong supplier networks to support component manufacturing.<\/li>\n
                8. Encourage long-term private investment beyond government incentives.<\/li>\n<\/ol>\n

                  Conclusion<\/strong>: The Mobile Phone Manufacturing Scheme marks a significant policy shift from promoting assembly to encouraging localization, component manufacturing, and innovation. If it is supported by strong infrastructure, skilled manpower, regulatory stability, and long-term private investment, the scheme can help India reduce import dependence and emerge as a major global electronics manufacturing hub.<\/p>\n

                  Question: “<\/strong>The Production Linked Incentive (PLI) scheme transformed India into a major mobile phone assembly hub, but deeper localization remains a challenge.” Discuss how the Mobile Phone Manufacturing Scheme (MPMS) seeks to address this gap.<\/p>\n

                  Source:<\/strong> Business line <\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

                  Source: The post \u201cIndia\u2019s Mobile Phone Manufacturing Story\u201d has been created based on “Factory reset\u201d published in \u201cBusiness Line\u201d on 27th July 2026. UPSC Syllabus: GS-3 – Economy Context: India’s mobile phone manufacturing sector has witnessed remarkable growth under the Production Linked Incentive (PLI) scheme. However, domestic value addition has remained low because most high-value… Continue reading India\u2019s Mobile Phone Manufacturing Story<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[12044,216,8184],"class_list":["post-368318","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","tag-business-line","tag-gs-paper-3","tag-indian-economy","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/368318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=368318"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/368318\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=368318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=368318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=368318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}