Govt notifies mobile phone manufacturing scheme; extra incentives for Indian brands
The Indian government has notified the Mobile Phone Manufacturing Scheme, offering incentives for domestic assembly and local value addition. The policy provides specific advantages for Indian-owned brands, including higher incentives and lower turnover thresholds compared to foreign competitors.
Why it matters
This scheme is a strategic effort to boost domestic manufacturing capabilities and reduce reliance on imported electronics components.
The Ministry of Electronics and Information Technology (MeitY) on Friday notified the Mobile Phone Manufacturing Scheme (MPMS), aimed at incentivising the domestic assembly of smartphones and greater local value addition in the process. The ₹62,500 crore scheme had been approved by the Union Cabinet on July 15, and continues the PLI Scheme for Large Scale Electronics Manufacturing (LSEM), which ran from 2020 to the last financial year.
With the notification, the Ministry provided some fresh information about how the scheme would be operationalised. For instance, phone makers receive additional incentives for sourcing certain parts domestically. This is on top of the base incentive (tapering down from 2.75-2.25% over the five-year tenure, with rates of 2.25-5% depending on the year and the incremental sales) for the assembly itself. These additional incentives amount to 1.5% (with individual component incentives ranging from 0.2-0.5%).
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