New Delhi: India’s ₹62,500-crore Mobile Phone Manufacturing Scheme (MPMS) is drawing interest from more than half a dozen companies seeking to tap New Delhi’s cash incentives to build Indian smartphone brands, in a push to replicate the value created by Chinese electronics brands.
Industry executives and government officials that Mint spoke with said the Ministry of Electronics and Information Technology (Meity), which announced the scheme on 15 July and notified it on 21 August, is already in discussions with industry stakeholders to assess which companies can credibly build Indian brands and how many such applications the government should consider.
Companies said to be seeking Meity’s incentives include electronics manufacturers Dixon Technologies and Optiemus Infracom, and electronics brands Lava, Mivi, Boltt and CMF. While is believed to have received interest from four more companies, Mint could not independently ascertain their identities.
The companies are looking to build smartphone brands from India, rather than merely manufacture devices for global brands. Apple, for instance, is a US brand with manufacturing operations in China, Vietnam and India, while retaining ownership of its patents. India is now seeking to create similar home-grown brands that would also need to manufacture devices locally to qualify for the centre’s incentives.
The shift is aimed at moving India’s electronics industry beyond low-margin assembly towards higher-value activities, including owning brands and intellectual property.
Alongside the attraction of cash incentives that can add to a business’s operating margin, owning an Indian smartphone brand could give global companies greater control over the consumer-facing end of AI services, said Rishi Padhi, principal – emerging markets dynamics at Gartner.
Healthy interest
A senior official directly involved in the process, who requested anonymity since none of the discussions have been officially cleared for public release, said Meity has seen “many companies that are keen to apply for the local brand incentives, because India is an increasingly well-networked and higher-value supply chain electronics economy that can support deep localization opportunities.”
“Our incentives are substantial, and we expect to receive many applications once the Indian brand part of the scheme is officially opened,” he added.
A copy of Meity’s MPMS reviewed by Mint shows that each of the companies named above is targeting incentives under the ‘Target Segment (TS)-2’ category. At least three officials and executives confirmed that the MPMS’s TS-2 framework will be released in three weeks, following which the companies are expected to submit their applications.
A senior executive privy to the discussions said Optiemus Infracom and CMF are considering signing a “definitive agreement” to apply for the scheme following the release of the framework. Neither company responded to Mint’s emails seeking comment. Emails to senior management at Dixon, Mivi, Lava and Boltt also remained unanswered.
To be sure, the MPMS will offer approved companies cash incentives of up to 6.5% of annual sales for local assembly, manufacturing of components and sourcing of components from within India. An additional 3% is reserved for setting up a local research and development (R&D) team, which is expected to file global smartphone design patents from India.
Brands applying for the scheme will need to have 51% Indian ownership, a majority of senior management holding Indian citizenship, their global headquarters registered in India, and patents and manufacturing operations within the country.
Strategic value
Industry stakeholders said the interest reflects both the scale of the incentives and the potential strategic value of owning a smartphone brand.
“India’s consumer ecosystem’s primary touchpoint is overwhelmingly a , and will continue to remain so for the foreseeable future. Currently, the entire ecosystem is struggling to match costs due to the entirety of the world’s memory and storage supplies going to data centres and IT-end servers. To tap this chance, a clutch of Chinese storage and memory suppliers have opened up—and Indian brands can leverage them to enter a market that does not have too many cost-effective products today,” said Padhi.
“The biggest monetizable software opportunity today is of AI, and whoever controls the final device in a user’s hand, will have a shot at controlling what AI platform runs on their device. Indian brands, though currently nonexistent, may want a shot at this to push Indian AI services such as that of Sarvam’s, to users,” Padhi further said.
However, not all are convinced. Navkendar Singh, associate vice-president at independent market researcher IDC India, said it may be “very difficult for a new brand to break into the current market and established strongholds.”
“There are two new Indian brands in the market, but their uptake, market share and presence is minimal because there has been no true innovation. There is an opportune cost gap in the under- ₹15,000 smartphone market that some Indian companies are trying to tap, but doing so means once again playing the low-cost game—which most of the market has moved on and away from,” Singh said.
He added that with wafer-thin margins in budget segments, “any new brand without any meaningful scale would struggle with operating costs, and the chances of success could be slim.”
The early interest comes as a surprise, as India’s smartphone industry has struggled over the past five years. In 2026, India is expected to sell 125 million smartphones, marking a steep market correction and bringing annual sales to their lowest level in a decade.