- You can access the Mobile Phone Manufacturing Scheme press release here.
- You can access the Semicon 2.0 press release here.
The Union Cabinet on Wednesday approved two manufacturing programmes worth a combined Rs 1.9 lakh crore to expand India’s mobile phone and semiconductor industries. The decisions include a new Rs 62,500 crore Mobile Phone Manufacturing Scheme and Semicon 2.0, a Rs 1,27,500 crore package aimed at strengthening chip design and manufacturing.
New incentives for phone manufacturing: The mobile phone scheme will run for five years, from FY2026-27 to FY2030-31, after the Production Linked Incentive scheme for large-scale electronics manufacturing ended on March 31, 2026.
Under the programme, companies manufacturing mobile phones in India will receive incentives ranging from 2.25% to 5% on eligible sales. They can receive an additional incentive of up to 1.5% for sourcing key components and sub-assemblies domestically.
Companies developing Indian mobile phone brands through product design and research can receive a further 3% incentive on eligible sales. The structure marks a shift from focusing mainly on phone assembly towards increasing domestic component production, design and research.
The government expects the scheme to support cumulative mobile phone production worth around Rs 39 lakh crore and create about 60,000 direct jobs by March 2031. It also expects the programme to increase exports and domestic value addition.
India has emerged as a major smartphone assembly hub, attracting production from companies such as Apple, Samsung, Xiaomi, Oppo and Vivo. However, manufacturers continue to depend on imports for several key components, limiting the value generated within the country.
Semicon 2.0 expands chip push: The Cabinet also cleared Semicon 2.0, which extends government support for the semiconductor industry after the first phase of the India Semiconductor Mission.
The programme focuses on six areas: chip design, semiconductor equipment and materials, fabrication plants, assembly and packaging facilities, research and development, and workforce training.
The government plans to support companies making semiconductor manufacturing equipment, chemicals and gases, encourage more fabrication and advanced packaging facilities, develop semiconductor intellectual property and expand training.
12 chip projects approved: The government intends the semiconductor programme to support the mobile phone manufacturing push by developing a broader domestic electronics supply chain beyond final assembly.
The government has approved 12 semiconductor manufacturing projects involving investments of more than Rs 1.64 lakh crore under the first phase.
These include one silicon fabrication plant, one silicon carbide fab, an integrated gallium nitride Micro LED display fab and nine chip packaging units. The projects are expected to supply chips for consumer electronics, automobiles,…
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