Law Updates

Subject

Summary: The Ministry of Electronics and Information Technology (MeitY) has introduced the Mobile Phone Manufacturing Scheme 2026, or MPMS, to support mobile phone manufacturing in India and encourage the growth of Indian mobile brands. The Scheme Notification was issued on 21 August 2026 under F. No. W/11/2026-IPHW. MPMS has a budgetary outlay of 62,500 crore rupees, including administrative charges, and runs for five financial years, from FY 2026-27 to FY 2030-31. Instead of using one common eligibility and incentive structure for everyone, MeitY has divided the Scheme into two parts. Target Segment 1 (TS1) focuses on mobile phone manufacturing, while Target Segment 2 (TS2) targets qualifying Indian mobile phone brands. For manufacturers, the Scheme is mainly a performance-based financial opportunity. It is not a compulsory licence, certification or manufacturing approval. A company must satisfy the applicable eligibility conditions and meet the required sales or brand-related criteria to benefit from the incentives. Notification at a Glance Particular Details Scheme Mobile Phone Manufacturing Scheme (MPMS) Issuing Authority Ministry of Electronics and Information Technology Division IPHW Division Document Type Scheme Notification File Number F. No. W/11/2026-IPHW Notification Date 21 August 2026 Gazette Gazette of India, Extraordinary, Part I—Section 1 Scheme Budget 62,500 crore rupees, including administrative charges Scheme Period FY 2026-27 to FY 2030-31 Target Segment 1 Incentivizing mobile phone manufacturing Target Segment 2 Supporting Indian mobile phone brands TS1 Minimum Turnover 10,000 crore rupees in FY 2025-26 TS2 Minimum Turnover 1,000 crore rupees in FY 2025-26 Domestic Sourcing Incentive Up to 1.5% of Eligible Sales TS2 Design and R&D Incentive An additional 3% of Eligible Sales Detailed Scheme Guidelines To be issued separately by MeitY Application Deadline Not expressly specified Separate Effective Date Not expressly specified The distinction between the notification date and the performance period deserves attention. The Gazette is dated 21 August 2026, while FY 2026-27 is stated to be the first performance year for TS1. The notification does not separately declare an effective date. Businesses should therefore use the dates exactly as the Scheme describes them rather than treating the publication date as an assumed effective date. The Regulatory Framework MPMS is a Government incentive scheme administered through MeitY. Its purpose differs from that of rules that require a manufacturer to obtain a licence or comply with a compulsory product standard. A company does not become non-compliant simply for not participating in MPMS. Participation matters to manufacturers and brands seeking the financial and other support offered under the Scheme. Three Government-level bodies are particularly relevant to its implementation.  The first is MeitY, which has issued the Scheme and will issue separate implementation guidelines. The second is the Project Management Agency (PMA), which will examine applications, verify eligibility and check eligible claims. The third is the Empowered Committee (EC), which will consider cases examined by the PMA and make recommendations to the competent authority. This structure also means that meeting a turnover condition alone should not be treated as a guarantee of an incentive. The application, eligibility verification, claim examination and approval process still applies. Why Has the Mobile Phone Manufacturing Scheme Been Introduced? MeitY links the Scheme with the growth of India's electronics and mobile phone manufacturing sector. According to the notification, electronics manufacturing has grown sevenfold, and electronics exports have grown elevenfold since FY 2014-15. The Government also states that smartphones became the country's single largest exported product in 2025, overtaking diesel fuel and cut diamonds. Against this background, MPMS has several stated objectives. It aims to: Increase the global competitiveness of India's mobile manufacturing sector, Increase manufacturing scale, Deepen the mobile phone manufacturing supply chain, Raise Domestic Value Addition, or DVA, Build stronger domestic manufacturing capabilities, Support the development of Indian mobile phone brands, and Generate employment. The design of the incentives shows where the Government wants businesses to focus. Manufacturing growth receives support, but additional benefits are attached to domestic component sourcing and, for qualifying Indian brands, domestic design and R&D. MPMS Budget, Duration and Target Segments The total budget for MPMS is 62,500 crore rupees, including administrative charges. The Scheme is described as budget-limited. It also allows the incentive allocation to shift between TS1 and TS2 based on funding requirements and the response received in each Target Segment. The five Scheme years are: FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 The division between TS1 and TS2 is more than an administrative classification. TS1 is aimed at manufacturers operating at substantial scale and places considerable importance on additional sales. TS2 has a lower turnover threshold but asks Indian brands to meet conditions relating to Indian ownership, management control, intellectual property and in-house design and R&D. This makes Target Segment one of the first questions a business should examine. Who Does the Mobile Phone Manufacturing Scheme Apply To? Direct eligibility under MPMS mainly concerns mobile phone manufacturers, including qualifying Electronics Manufacturing Services companies. Business Category MPMS Relevance Mobile phone manufacturers Can qualify under the relevant Target Segment if conditions are met EMS companies Expressly included among eligible manufacturers Existing mobile brands Can be relevant under TS1 New mobile brands Can enter TS1 after satisfying the prescribed sales condition New mobile brands Specifically covered by TS2 Component manufacturers Mainly indirect beneficiaries of the localisation push, unless otherwise covered Electronics Manufacturing Services (EMS) companies manufacture electronic products for brands and other businesses. MPMS expressly recognises these companies rather than restricting the Scheme only to businesses selling phones under their own brand. Component manufacturers sit in a different position. The Scheme can make domestic component sourcing more attractive, but the notification does not say that every component manufacturer becomes a direct MPMS applicant. TS1: Who Is Eligible for Mobile Phone Manufacturing Incentives? TS1 is meant for large-scale mobile phone manufacturing. A mobile phone manufacturer, including an EMS company, must: Be registered in India, and Have a minimum turnover of 10,000 crore rupees in FY 2025-26. That is the starting eligibility test. Claiming an incentive involves additional conditions. For existing brands, the Scheme sets annual Threshold Sales. For new brands, it first requires the brand to reach a prescribed annual sales level in India. The calculations are made on a brand-by-brand basis, which is particularly relevant when one applicant handles several brands or when a brand uses more than one EMS manufacturer. Existing Mobile Phone Brands For TS1, the Scheme defines an existing brand as one that had domestic manufacturing and sales in FY 2025-26. Such a brand must achieve the specified additional sales each year to be eligible to claim the incentive for that year. This requirement is called Threshold Sales. New Mobile Phone Brands A new brand follows a different route. It becomes eligible under MPMS only after achieving total annual sales of 10,000 crore rupees in India. After reaching that level, it must satisfy a Threshold Sales requirement of 5,000 crore rupees year-over-year to avail the incentive. The notification does not prescribe a minimum number of years for which the new brand must have existed. Annual Sales Thresholds under TS1 For an existing brand, the threshold rises each year. Financial Year Threshold Sales Over and Above FY 2025-26 Total Sales FY 2026-27 5,000 crore rupees FY 2027-28 10,000 crore rupees FY 2028-29 15,000 crore rupees FY 2029-30 20,000 crore rupees FY 2030-31 25,000 crore rupees These figures should not be confused with the 10,000 crore rupees turnover condition for entry into TS1. The turnover requirement checks whether the manufacturer falls within the eligible applicant category. Threshold Sales determine whether the existing brand meets the sales condition for claiming the incentive in a particular Scheme year. By FY 2030-31, an existing brand must therefore reach Threshold Sales of 25,000 crore rupees in addition to its total FY 2025-26 sales. How Are Baseline Sales and Eligible Sales Calculated Under TS1? The actual incentive calculation starts with Baseline Sales. The Scheme states that FY 2026-27 is the first performance year. Baseline Sales For each financial year, Baseline Sales are determined by taking the brand's domestic sales of the Target Segment product in the preceding financial year and adding 15% to that amount. In simple terms: Baseline Sales = Previous financial year's domestic Target Segment sales + 15% The baseline is therefore not fixed permanently at FY 2025-26. It moves from year to year. That makes the sales hurdle more demanding than a structure based on one fixed base year. As the previous year's sales rise, the next year's baseline also changes. Eligible Sales Once the baseline has been established, Eligible Sales are calculated as: Eligible Sales = Total Target Segment sales for the financial year – Baseline Sales The Scheme calculates Baseline Sales, Eligible Sales, and Threshold Sales separately for each brand. This point matters because the incentive is not simply calculated on a company's total turnover. The relevant brand and Target Segment sales have to be identified correctly. TS1 Incentive Rates from FY 2026-27 to FY 2030-31 The TS1 incentive structure is slightly more complicated than a simple flat percentage. It has two parts. First Portion of Eligible Sales For the first portion, paragraph 7.3(a) refers to Eligible Sales up to the difference between: The average sales of FY 2023-24, FY 2024-25 and FY 2025-26, and Baseline Sales for the relevant financial year. The applicable rates reduce gradually over the Scheme period. Financial Year Incentive Rate FY 2026-27 2.75% FY 2027-28 2.75% FY 2028-29 2.50% FY 2029-30 2.50% FY 2030-31 2.25% The wording of this part is technical, and the Gazette does not explain every possible calculation situation in detail. Businesses should therefore be careful about building financial projections around their own interpretation before the detailed Scheme Guidelines are available. Remaining Eligible Sales Eligible Sales remaining over and above the portion described above are subject to another rate. Financial Year Incentive Rate FY 2026-27 5% FY 2027-28 5% FY 2028-29 4.5% FY 2029-30 4.5% FY 2030-31 4% For this reason, calling TS1 simply a "5% incentive scheme" would leave out an important part of the actual calculation. The incentive depends on which portion of Eligible Sales is being considered and on the financial year in which the claim is made. Additional Incentive for Domestic Sourcing of Mobile Components MPMS provides manufacturers with an additional incentive when certain mobile phone components and sub-assemblies are sourced domestically. The maximum additional incentive is 1.5% of Eligible Sales. The break-up is: Component or Sub-Assembly Additional Incentive Display Module 0.30% Camera Module 0.30% Enclosure 0.50% Batteries, including cells 0.20% USB cables, including connectors 0.20% Maximum Total 1.50% This part of MPMS is particularly relevant to manufacturers considering the economics of localisation. Domestic sourcing, however, is not described as a blanket requirement that every applicant must fulfil to participate in MPMS. The additional 1.5% is an extra incentive linked to localisation. That is an important distinction. When Can the Domestic Sourcing Incentive Be Claimed? Simply purchasing one of the listed components in India is not enough to establish eligibility for the additional incentive. The notification says that the relevant component or sub-assembly must be localised for at least 25% of the total mobile phone units sold in a financial year. The additional incentive is paid on a pro rata basis. The Gazette does not specify the detailed evidence manufacturers must provide to prove localisation. For instance, it does not specify in this notification: A supplier certificate format, A domestic-value calculation, An auditor's certificate, A prescribed component-origin declaration, or A particular verification process. Businesses should wait for the official implementation requirements before treating any internally developed documentation process as sufficient. What Is the Incentive Ceiling Under MPMS? The incentive percentages are only one part of the calculation. MPMS also sets a brand-wise incentive ceiling based on the annual commitment submitted by the applicant or brand. The total incentive disbursement is limited to the lower of: The cumulative annual commitment, or The overall budgetary outlay available under the Scheme. This makes it difficult to estimate an applicant's potential benefit merely by multiplying a sales figure by the headline incentive percentage. The annual commitment and the overall Scheme ceiling have to be considered as well. TS2: Supporting Indian Mobile Phone Brands TS2 takes a different approach. Its focus is not simply on producing more phones. The segment is meant to help develop Indian mobile brands that retain ownership, management, intellectual property and design capability within India. It provides both fiscal and possible non-fiscal support. The initial turnover requirement is also much lower than TS1, although businesses must satisfy a more detailed Indian-brand test. Who Is Eligible Under TS2? An applicant under TS2 must be a mobile phone manufacturer, including an EMS company, that: is registered in India, and Has a minimum turnover of 1,000 crore rupees during FY 2025-26. The qualifying brand must then meet all the prescribed Indian-brand conditions. One major difference from TS1 is that Indian brands under TS2 do not have a minimum Threshold Sales requirement. Eligibility of Indian brands under this segment is subject to selection by the Empowered Committee. What Makes a Mobile Phone Brand an "Indian Brand" Under MPMS? A brand does not qualify under TS2 merely because its phones are manufactured in India or because it markets itself as Indian. The Scheme gives five specific conditions. The Brand Must Be Registered or Incorporated in India The brand should be registered or incorporated in India. This creates the basic domestic corporate link required under TS2. Intellectual Property and Trademark Must Be Held in India The intellectual property and trademark associated with the brand must be held within India. Businesses with complicated overseas IP structures may therefore need to examine this condition carefully before assuming TS2 eligibility. Management Control Must Remain With Indian Citizens The brand's management must be in the hands of Indian citizens. This is a separate requirement from shareholding. A company should therefore not look only at its equity ownership while reviewing the Scheme. Indian Citizens Must Hold More Than 51% Shareholding The entity claiming Indian Brand status must have more than 51% shareholding held by Indian citizens. The wording is "more than 51%". It should not be simplified to "51% or more". In-House R&D and Design Must Be in India The brand must also have in-house Research and Development (R&D) and design capabilities in India. This gives TS2 a clear product-development element. The Gazette, however, does not tell businesses exactly how much R&D expenditure, infrastructure, staffing or design activity will be considered sufficient. Those details should come from the official implementation framework rather than assumptions. How Does the One-Year Gestation Period Work Under TS2? TS2 applicants may be given a one-year gestation period. Without that period, FY 2026-27 is the first performance year. If the applicant opts for the gestation period, FY 2027-28 becomes the first performance year. The baseline changes at the same time. For a normal TS2 applicant: Baseline Sales = FY 2025-26 sales For an applicant using the gestation period: Baseline Sales = FY 2026-27 sales The notification does not spell out all the consequences of this one-year shift. In particular, it does not separately explain in this provision whether the gestation option changes the end of the five-year Scheme tenure. That point should be read together with the detailed Scheme Guidelines when they are issued. How Are Eligible Sales Calculated Under TS2? TS2 uses a simpler calculation than TS1. Eligible Sales are calculated by subtracting the applicable Baseline Sales from the brand's total sales for that financial year. Eligible Sales = Total sales during the relevant financial year – Baseline Sales Both Baseline Sales and Eligible Sales are calculated brand-wise. Unlike TS1, the TS2 notification does not add a moving 15% increment to the previous year's baseline. What Incentives Are Available to Indian Mobile Phone Brands? A qualifying Indian brand can potentially access three forms of fiscal incentive under TS2. 5% Incentive on Eligible Sales The main TS2 incentive is 5% of Eligible Sales of mobile phones manufactured in India. The notification does not show a tapered, year-by-year TS2 base rate, unlike the TS1 table. Additional Domestic Sourcing Incentive Indian brands can also benefit from the domestic sourcing incentive. The Scheme states that the calculation criteria for this incentive are the same for both Target Segments. This brings the same component categories, localisation requirement and maximum 1.5% additional incentive into the TS2 structure. Additional 3% for Indian Design and R&D A further 3% incentive on Eligible Sales is available for Indian product design and R&D. This is one of the most commercially interesting parts of TS2 because the Scheme does not look only at where the phone is assembled. It also gives financial weight to where the product is designed and developed. The notification does not yet provide detailed qualification parameters for this 3% incentive. Applicants should therefore avoid defining "Indian design and R&D" until the Government provides the implementation criteria. TS1 vs TS2: What Is the Real Difference? Parameter TS1 TS2 Main focus Increasing mobile phone manufacturing Supporting Indian mobile phone brands Minimum FY 2025-26 turnover 10,000 crore rupees 1,000 crore rupees Threshold Sales Applicable for existing brands No minimum Threshold Sales Baseline Previous year's domestic sales + 15% FY 2025-26 sales, or FY 2026-27 with gestation Main incentive Two-part tapered structure 5% of Eligible Sales Domestic sourcing incentive Up to 1.5% Up to 1.5% Indian design and R&D incentive No separate 3% stated Additional 3% One-year gestation Not stated Available subject to Scheme provision Indian ownership conditions Not prescribed in the same manner Mandatory Indian IP/trademark condition Not prescribed in the same manner Mandatory EC selection of Indian brands Not stated in the same form Applicable TS1 is therefore more closely linked with scale and continued sales growth. TS2 asks a different question: whether the business is genuinely structured as an Indian brand with Indian control, ownership, and IP and product-development capability. Fiscal and Non-Fiscal Support for Indian Mobile Brands The financial incentives under TS2 are clearly identified in the notification. Non-fiscal support is less specific. MeitY states that because fiscal and non-fiscal measures need to work together to build Indian brands, the Government may introduce necessary non-fiscal measures as required. The Empowered Committee can recommend such measures. What those measures will actually be is not stated. There is therefore no basis at present to promise an Indian brand: Procurement preference, Tax relief, Customs benefits, Advertising assistance, Export subsidies, or Market-development support Under this clause. Those benefits should be discussed only if the Government formally introduces them. Can an Applicant Submit More Than One MPMS Application? The notification is direct on this point. An applicant making multiple applications will not be eligible under MPMS. The Gazette does not go further into group-company situations, related entities or common promoter structures. Businesses with complicated corporate arrangements should therefore wait for more detailed guidance rather than assuming how the restriction will apply across an entire group. Can MPMS Applicants Participate in Other Government Schemes? Yes, at least from the standpoint of basic eligibility. The notification states that eligibility under MPMS does not affect eligibility under any other Scheme, and vice versa. That does not necessarily mean two Government incentives can always be claimed on the same sale, investment or expenditure. Those questions depend on the conditions of MPMS and the other Scheme involved. The safer reading is that participation in one Scheme does not automatically disqualify a business from another. How Will MPMS Approval and Incentive Disbursement Work? Incentives are to be disbursed to mobile phone manufacturers, including EMS companies, in India. The sales calculations behind those incentives are nevertheless performed for the brand. Applicants can submit claims quarterly, provided they meet the eligibility criteria. The Scheme Notification does not provide the entire claim workflow. Instead, it states that the approval and disbursement procedures will be handled under the Scheme Guidelines. For businesses preparing early, this distinction matters. There is no reason to rely on unofficial document lists, filing portals, application dates or processing periods until MeitY publishes them. What If One Brand Uses Several EMS Manufacturers? This situation is specifically covered. Where one brand gets its phones manufactured through more than one EMS Company, that brand must provide the necessary certification for: Baseline Sales, Threshold Sales, and Eligible Sales. The logic is fairly practical. MPMS measures performance at the brand level, even when manufacturing is divided among several companies. Sales information, therefore, needs to be consolidated in a way that prevents the same brand's performance from being counted inconsistently across different EMS manufacturers. The notification does not identify the certifying person, the prescribed certificate, or the required format. Those details should come from the Scheme Guidelines. Role of the Project Management Agency MPMS will be implemented through a Project Management Agency (PMA). The PMA is not simply a payment-processing body. Its role covers much of the Scheme's initial administration. According to the notification, its responsibilities include: Appraising applications, Verifying eligibility, Examining claims eligible for incentive disbursement, Compiling Scheme progress and performance information, Collecting data relating to incremental investment and Eligible Sales, and Providing secretarial, managerial and implementation support. MeitY may also assign further responsibilities to the PMA from time to time. The reference to incremental investment in the PMA's data work should not be read as an invented minimum investment threshold. The eligibility clauses reproduced in this notification do not prescribe such a figure. What Does the Empowered Committee Do? The Secretary, MeitY, will chair the Empowered Committee (EC). Its members will come from: NITI Aayog, Department of Economic Affairs, Department of Expenditure, Department of Revenue, Department for Promotion of Industry and Internal Trade, and Directorate General of Foreign Trade. Members must be at least of Joint Secretary Rank. The Committee will consider applications that the PMA has found eligible and recommend suitable cases to the competent authority. It performs a similar review for claims submitted for incentive disbursement. The EC also has an ongoing review function. It can examine the performance of eligible companies in areas such as production, employment generation and value addition. Where changes are needed for implementation, the Committee may recommend amendments to the Scheme. Can New Mobile Products Be Included Later? MPMS has been written with technological change in mind. The notification allows the Empowered Committee to consider adding new or advanced products under a Target Segment based on technological advancement in the mobile phone sector. No future products are named in the Gazette. Businesses should therefore treat this as an enabling provision rather than assuming that any particular emerging device or technology is already covered. How Will MPMS Affect Mobile Manufacturers and the Supply Chain? The impact will not be the same for every business. Large Mobile Phone Manufacturers For a large manufacturer, TS1 can provide a meaningful production-linked financial benefit, but the sales hurdles are high. A business has to consider: 10,000 crore rupees FY 2025-26 turnover eligibility, Brand-wise Threshold Sales, A moving Baseline Sales calculation, The two-part incentive rate, Localisation requirements for additional incentives, and Quarterly claim readiness. The commercial question, therefore, is not simply "Are incentives available?" It is "Can this brand realistically generate Eligible Sales after meeting the Scheme's thresholds and baseline rules?" EMS Companies EMS businesses have been expressly brought into the Scheme. This matters because a large part of modern mobile production can take place through contract manufacturing rather than a brand operating every factory itself. The Scheme recognises that model while continuing to calculate sales at the brand level. Indian Mobile Brands TS2 gives Indian brands a route that does not require the same 10,000 crore rupees turnover entry threshold as TS1. In return, the brand must demonstrate a much stronger Indian connection through ownership, control, and IP and product development capabilities. For a qualifying brand, the combination of: 5% Eligible Sales incentive, Up to 1.5% domestic sourcing incentive, and 3% Indian design and R&D incentive Makes TS2 materially different from a basic manufacturing subsidy. Component Suppliers Suppliers of display modules, camera modules, enclosures, batteries, cells and USB cable assemblies may see greater interest from manufacturers trying to improve localisation. That is a likely commercial effect, not a guaranteed outcome for the Government. Whether a supplier gains new orders will still depend on technical qualification, pricing, production capacity, quality and commercial decisions made by handset manufacturers. Finance and Compliance Teams Companies considering MPMS will need reliable internal data. Brand-level sales numbers, turnover, manufacturing arrangements and sourcing information can directly affect eligibility and incentive calculations. TS2 applicants will also need clarity on corporate ownership, IP, trademarks, management control and R&D arrangements. This is where poor internal records can become a practical problem, even if the underlying business appears eligible. What Are the Potential Benefits of MPMS? For businesses that fit the Scheme, the benefits are fairly clear. First, incentives are linked to actual manufacturing performance. A manufacturer that produces in India and generates Eligible Sales may access financial support according to the applicable rate. Second, localisation receives an extra reward. The additional incentive of up to 1.5% gives manufacturers another reason to examine domestic component sourcing. Third, Indian brands receive separate treatment. They are not simply placed inside the same framework designed for very large manufacturing companies. Fourth, product development receives financial recognition. TS2 gives an additional 3% incentive for Indian design and R&D. Fifth, EMS manufacturing is recognised. The Scheme acknowledges that a brand may rely on specialist manufacturing companies. None of these benefits is automatic. Actual payment depends on Scheme eligibility, performance, verification, approval, applicable ceilings and future procedural requirements. What Could Be Difficult for Businesses? MPMS is financially attractive on paper, but some conditions will require careful planning. TS1 Is Designed for Scale The 10,000 crore rupees turnover threshold already limits the pool of potential TS1 applicants. The annual Threshold Sales then rise from 5,000 crore rupees above FY 2025-26 sales to 25,000 crore rupees above the same base by FY 2030-31. This makes TS1 difficult to treat as an easy incentive for smaller manufacturers. The Baseline Keeps Moving For TS1, Baseline Sales are based on the previous year's domestic sales plus 15%. A company cannot therefore rely on a fixed historical benchmark throughout the Scheme. Localisation Needs to Reach a Meaningful Level A manufacturer cannot claim the extra domestic-sourcing incentive merely because it has started buying a small number of components locally. The 25% unit condition has to be considered. TS2 Requires More Than Indian Incorporation An Indian-registered company may still fall short if its IP, management control, shareholding, or in-house R&D structure does not meet the stated conditions. Important Procedural Details Are Still Outside the Notification The Gazette provides the policy structure but leaves many practical steps to be detailed in separate Guidelines. Businesses should therefore be careful about committing to an application strategy based on assumptions. Is MPMS a Benefit or an Additional Business Burden? The Scheme is voluntary and incentive-based, so describing it simply as an additional compliance burden would not be accurate. At the same time, claiming a substantial Government incentive naturally comes with performance and verification conditions. What Businesses May Gain What They Need to Manage Production-linked financial incentive High turnover and sales conditions Up to 1.5% domestic sourcing incentive Localisation threshold Separate route for Indian brands Ownership and control tests Additional 3% for Indian design and R&D In-house capability requirement Five-year Scheme period Ongoing performance tracking Recognition of multi-EMS manufacturing Brand-level certification Possible non-fiscal support Details not yet defined For businesses already operating at the required scale, TS1 may provide a useful way to support further production growth. TS2 may be particularly relevant for Indian brands that already have the ownership, IP and product-development structure described in the Gazette. The harder question will be commercial viability. A company still needs to compare the potential incentive with the sales growth, localisation effort, internal controls and investment decisions required to earn it. Business Opportunities Created by MPMS 2026 MPMS is primarily a mobile manufacturing incentive, but its commercial effects can extend further into the supply chain. Mobile Phone Manufacturing Eligible manufacturers have a direct financial reason to expand production and increase qualifying sales. EMS Manufacturing Contract manufacturers can participate in the Scheme structure where the eligibility conditions are met. This may make large-scale EMS capacity strategically important for brands that do not manufacture all phones themselves. Component Localisation The Scheme specifically identifies: Display modules, Camera modules, Enclosures, Batteries and cells, and USB cables and connectors. Indian businesses manufacturing these parts may find themselves relevant to handset makers reviewing localisation plans. Indian Mobile Brands TS2 gives qualifying domestic brands a separate policy route, particularly where they control their IP and maintain product design and R&D capabilities in India. R&D and Product Design The additional 3% TS2 incentive makes Indian design and R&D commercially relevant for the incentive calculation, rather than treating them as background activities. The Scheme does not guarantee new orders, market share or revenue in any of these areas. These are business opportunities that may arise from the incentive design. Scheme Guidelines Will Be Important Before Applications Begin The Gazette sets out the core structure of MPMS, but it is not the final procedural manual. MeitY expressly states that Scheme Guidelines for implementation will be issued separately. That means businesses still need official details on several practical matters. The notification itself does not presently give: An application opening date, An application closing date, An application portal, Prescribed application forms, A complete document list, Detailed localisation evidence requirements, The certification format for multi-EMS brands, The method for proving Indian design and R&D, Application fees, Claim-processing timelines, or A complete disbursement workflow. These should not be filled in from older schemes or unofficial sources. There are also areas where the Guidelines may help businesses understand the Gazette more clearly, including the practical calculation under TS1 paragraph 7.3(a) and the working of the TS2 gestation period within the Scheme tenure. Can MPMS Change During Its Five-Year Period? Yes. The notification allows MPMS and its Guidelines to be reviewed and amended from time to time. The areas that can be reconsidered include: Products covered under TS1 and TS2, Applicable incentive rates, Scheme tenure, Sales, Gestation period, and Other matters considered necessary for effective implementation. The Empowered Committee may recommend such amendments, subject to approval by the Minister of Electronics and Information Technology. Manufacturers planning around MPMS should therefore monitor subsequent MeitY notifications and Guidelines rather than relying solely on the original Gazette. What Should Mobile Manufacturers and Indian Brands Do Now? There is no reason to wait until an application window opens before checking whether MPMS is commercially relevant. Businesses can start with the information already available. Identify whether TS1 or TS2 is relevant. A large manufacturer and an Indian brand may face very different eligibility tests. Check FY 2025-26 turnover carefully. The basic threshold is 10,000 crore rupees for TS1 and 1,000 crore rupees for TS2. Review sales at the brand level. TS1 applicants should understand their FY 2025-26 position, annual Threshold Sales and moving baseline before estimating possible incentives. Map domestic component sourcing. Manufacturers interested in the extra 1.5% should check the listed components and the extent to which sourcing is already localised. Test the Indian-brand conditions for TS2. Incorporation alone is not enough. IP, trademarks, management control, shareholding, R&D and design all need attention. Review multi-EMS manufacturing arrangements. Brands using more than one EMS Company should prepare for consolidated brand-level sales certification. Keep the financial model conservative. Do not treat the maximum headline rates as guaranteed incentive receipts before applying the correct Eligible Sales rules and ceiling. Track Meet’s Scheme Guidelines. Application procedures, evidence requirements and claim mechanics should be taken from the final official instructions. How Corpseed Can Help With MPMS A first reading of MPMS may make eligibility look like a turnover question. In practice, there is more to review. For TS1, businesses need to understand the relationship between turnover, Threshold Sales, Baseline Sales, Eligible Sales and incentive rates. For TS2, the assessment covers areas such as Indian shareholding, management control, intellectual property, trademarks, domestic R&D, and product design. Corpseed can provide PLI scheme consulting services for manufacturers and brands that want to assess their position before moving into the formal application or claim stage. Relevant support can include: MPMS eligibility assessment: Checking whether the applicant's business profile fits TS1 or TS2. Target Segment review: Comparing the company's manufacturing and brand structure with the conditions applicable to the relevant segment. PLI eligibility assessment: Reviewing turnover, brand status and Scheme-specific qualifying conditions before an application is prepared. Sales-data review: Helping organise Baseline Sales, Threshold Sales and Eligible Sales information for internal assessment and future claim preparation. Indian-brand eligibility review: Assessing incorporation, Indian shareholding, management control, IP, trademarks and in-house R&D/design position under TS2. Domestic sourcing assessment: Reviewing the listed components, localisation position and conditions attached to the additional sourcing incentive. Multi-EMS readiness support: Helping organise brand-level sales and manufacturing information where a brand uses several EMS companies. Scheme Guideline review and application support: Interpreting later MeitY Guidelines and assisting with the formal process once application and claim procedures are officially notified. Incentive claim support: Helping businesses organise information for claims based on the final Government requirements. Ongoing regulatory compliance services: Supporting electronics manufacturers with related regulatory and documentation matters where separately applicable. The purpose of professional support is to help a business determine whether the Scheme fits its actual operating structure and to organise the information needed for an accurate application. It cannot guarantee selection by the Empowered Committee, approval by the competent authority or payment of a particular incentive amount. Mobile phone manufacturers, EMS companies and Indian brands considering MPMS can seek PLI scheme consulting services to review their eligibility, sales structure, localisation position and application readiness against the official Scheme conditions. Key Takeaways The Mobile Phone Manufacturing Scheme 2026 offers substantial financial support, but it has been designed for specific categories of manufacturers and Indian mobile brands rather than the entire electronics sector. The practical points businesses should remember are: MPMS has a budget of 62,500 crore rupees and runs from FY 2026-27 to FY 2030-31. TS1 requires a turnover of at least 10,000 crore rupees in FY 2025-26. Existing TS1 brands must satisfy rising annual Threshold Sales. TS1 uses a moving Baseline Sales calculation based on the previous year's domestic sales plus 15%. Domestic sourcing of specified components can provide an additional incentive of up to 1.5%. TS2 has a lower 1,000 crore rupees turnover threshold, but qualifying brands must meet Indian ownership, control, and IP and R&D conditions. Eligible TS2 brands receive a 5% base incentive, with an additional 3% available for Indian design and R&D. Applicants making multiple applications are not eligible. Quarterly claims are permitted subject to the Scheme conditions. Detailed application and disbursement requirements will depend on separate MeitY Scheme Guidelines.