India is preparing to launch domestically designed smartphones built on indigenous technology within the next 10 to 14 months. Electronics and IT Minister Ashwini Vaishnaw has made it clear that Indian firms aiming to benefit from the government's Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS) must create their own original phone hardware designs and possess full intellectual property rights over them. The government has taken a firm stance that no company will receive financial incentives for reproducing or cloning existing products from other brands.
Strict Conditions for Design and Intellectual Property Rights
While detailing the specifics of the MPMS, Electronics and IT Minister Ashwini Vaishnaw stated that applicants must furnish clear proof of owning the intellectual property rights for their device architecture. He emphasized that the government has set uncompromising criteria for evaluating domestic phone designs. According to Vaishnaw, three Indian entities have already been shortlisted and requested to submit their prospective design blueprints. The ministry expects these three Indian companies to demonstrate the capacity to enter the market over the next 10 to 14 months with in-house created hardware that matches global best-in-class product standards.
Current State of Domestic Mobile Phone Design
At present, India lacks fully locally designed smartphones in the commercial market. Although domestic mobile brands such as Lava International and AI Plus assert that they handle smartphone design locally, the broader ecosystem relies heavily on imported specifications. The government's new initiative aims to alter this reliance by establishing true hardware R&D capabilities within the country's borders.
Two-Tier Structure of the MPMS Incentive Scheme
The Rs 62,500 crore Mobile Phone Manufacturing Scheme has been split into two distinct operational categories to support different tiers of the market
- Target Segment 1 (TS1): Focuses on promoting broad-scale mobile phone manufacturing. Eligible entities include contract electronics manufacturers and mobile phone companies that recorded a minimum turnover of Rs 10,000 crore during the previous financial year.
- Target Segment 2 (TS2): Dedicated to supporting native Indian mobile phone brands. To qualify under TS2, companies must maintain at least 51% Indian ownership and achieve a turnover of no less than Rs 1,000 crore in the financial year 2025-26.
Furthermore, established brands seeking incentives under TS2 are required to demonstrate significant commercial expansion. They must achieve an incremental sales growth of at least Rs 5,000 crore annually over their base financial year 2025-26 total turnover to remain eligible for financial disbursements under the program.
Rebuilding India's Indigenous Mobile Brand Ecosystem
Reflecting on the industry's historical trajectory, Vaishnaw noted that India previously possessed a thriving mobile manufacturing setup. However, intense market competition from Chinese firms alongside complex tax issues created significant hurdles, making it difficult for native Indian brands to maintain their market position. The minister expressed confidence that the newly structured MPMS framework will rebuild the domestic brand ecosystem, encouraging local manufacturers to invest in genuine innovation and long-term intellectual property development.
