Tamil Nadu was the country’s top exporter of electronics goods at $19.9 billion,
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The new Mobile Phone Manufacturing Promotion Scheme (MPMS) will help Tamil Nadu, the top electronics exporter of the country, further deepen its electronics supply chain, with State officials and industry executives expecting the scheme to help the State move beyond handset assembly.
The ₹62,500-crore MPMS scheme announced on Wednesday offers up to 1.5 per cent in additional incentives for sourcing key components and sub-assemblies locally, and this offers a significant opportunity for Tamil Nadu to attract component manufacturers, S Vijayakumar, TN Industries Secretary, told businessline.
“We can support existing manufacturers in increasing local sourcing by helping develop a strong supplier ecosystem within the State,” he said. Tamil Nadu is already home to major manufacturers, and the incentives can encourage existing companies to expand capacity and attract new global manufacturers, he added.
Industry executives also supported the view.
The scheme is particularly excellent for Tamil Nadu, Sasikumar Gendham, President, ELCINA (Electronic Industries Association), said. “The additional push for domestic sourcing offered in the new scheme will spur more component manufacturing in the State, which is already among the top beneficiaries of the Electronics Component Manufacturing Scheme (ECMS),” he said. This will bring in new players to the already large base and also spur expansion by existing companies, he added.
Another State official, who wished to not be named, said that Tamil Nadu is well placed to benefit from MPMS with around 38-40 per cent of India’s smartphone shipments originating from Kanchipuram and Chengalpet districts. The announced incentive for product design and research and development is also advantage Tamil Nadu, given Chennai’s engineering talent, the person added, noting that the State will need to compete actively for these investments.
The Southern State was the country’s top exporter of electronics goods at $19.9 billion, a 36 per cent growth YoY with mobile phone exports to the US aiding the growth. On a national basis, mobile phones have moved from the 153rd largest export item in FY 2014-15 to become India’s largest export product in FY 2025-26.
Tarun Pathak, Research Director, Counterpoint Research, said that with its decades-old manufacturing DNA, deep logistics support and a highly trained workforce, Tamil Nadu has become the definitive blueprint for global tech OEMs executing a ‘China+1’ diversification strategy. “It is no longer just an assembly destination and this policy will further bring component players to the State,” he said.
The Union Government in a statement on Tuesday pointed out that some of the country’s largest manufacturing facilities employ tens of thousands of people across their operations. “Hosur & Sriperumbudur (Tamil Nadu) and Bengaluru (Karnataka) mobile manufacturing units alone are providing quality employment to more than one lakh people,” the government said.
With inputs from T E Rajasimhan
Published on July 15, 2026
