UPSC Prelims Practice Questions — Centre notifies key scheme to manufacture mobile phones
Q1. Consider the following statements regarding the Mobile Phone Manufacturing Scheme (MPMS) and the scheme it succeeds:
1. Its outlay of ₹62,500 crore is spread over five years from FY2026-27 to FY2030-31, whereas the predecessor Production Linked Incentive Scheme for Large Scale Electronics Manufacturing ran up to FY2025-26.
2. Unlike the predecessor scheme, which rewarded eligible sales alone, MPMS carries an additional incentive of up to 1.5% linked to domestic sourcing of key components and sub-assemblies.
3. Over its tenure the scheme is expected to yield cumulative mobile phone production of about ₹39 lakh crore and around 60,000 direct jobs.
Which of the statements given above is/are correct?
- Its outlay of ₹62,500 crore is spread over five years from FY2026-27 to FY2030-31, whereas the predecessor Production Linked Incentive Scheme for Large Scale Electronics Manufacturing ran up to FY2025-26.
- Unlike the predecessor scheme, which rewarded eligible sales alone, MPMS carries an additional incentive of up to 1.5% linked to domestic sourcing of key components and sub-assemblies.
- Over its tenure the scheme is expected to yield cumulative mobile phone production of about ₹39 lakh crore and around 60,000 direct jobs.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q2. Under the Mobile Phone Manufacturing Scheme, the notified base incentive rate is applied to which one of the following bases?
- A. Eligible sales of mobile phones manufactured in India by the approved applicant
- B. Incremental capital investment made in plant, machinery and associated equipment
- C. Free-on-board value of mobile phones exported from India in the given fiscal year
- D. Domestic value addition achieved over the base year by the approved applicant
Q3. As officially stated at the time of the notification of the Mobile Phone Manufacturing Scheme, India's electronics exports have grown by approximately how many times since FY2014-15?
- A. About 5 times
- B. About 7 times
- C. About 11 times
- D. About 15 times
Q4. Which one of the following became India's single largest export category in calendar year 2025?
- A. Petroleum products refined and shipped from Indian coastal refineries
- B. Smartphones assembled in India, worth about $30 billion in overseas shipments
- C. Cut and polished diamonds processed largely in the Gujarat cluster
- D. Pharmaceutical formulations exported chiefly to regulated Western markets
Q5. Applications and incentive claims under the Mobile Phone Manufacturing Scheme are considered by an inter-ministerial empowered committee that includes representatives of NITI Aayog, the Departments of Economic Affairs, Expenditure and Revenue, DPIIT and DGFT. This committee is chaired by which one of the following?
- A. Secretary, Department for Promotion of Industry and Internal Trade
- B. Vice-Chairman, NITI Aayog
- C. Secretary, Ministry of Electronics and Information Technology
- D. Secretary, Department of Telecommunications, Ministry of Communications
Q6. Once the Mobile Phone Manufacturing Scheme was operationalised, which one of the following is the lead body entrusted with implementing the scheme on the ground?
- A. The inter-ministerial empowered committee of Secretaries constituted for the scheme
- B. A Project Management Agency designated for the scheme
- C. NITI Aayog, acting as the appraisal body for production-linked schemes
- D. The Directorate General of Foreign Trade, as the export verification authority
Q7. Under the Mobile Phone Manufacturing Scheme, the additional domestic-sourcing incentive of up to 1.5% is disaggregated into separately notified rates of 0.2% to 0.5% for individual key components. For how many such components are individual rates notified?
- A. Six
- B. Five
- C. Four
- D. Three
Q8. Which one of the following statements about the administration of the Mobile Phone Manufacturing Scheme is correct?
- A. It is administered by the Department of Telecommunications, which also administers the production-linked incentive scheme for telecom and networking products.
- B. It is administered by the Ministry of Heavy Industries, which also administers the production-linked incentive scheme for automobiles and auto components.
- C. It is administered by the Ministry of Electronics and Information Technology, which also administers the Electronics Component Manufacturing Scheme.
- D. It is administered by the Ministry of Electronics and Information Technology, but incentive claims are appraised by DPIIT under the Ministry of Commerce and Industry.
Q9. Consider the following statements about the treatment of Indian-owned mobile phone brands under the Mobile Phone Manufacturing Scheme:
1. The scheme explicitly targets the creation of Indian-owned brands with Indian design and Indian intellectual property, and not merely contract assembly for foreign brands.
2. Indian-brand applicants qualify at a lower turnover threshold — ₹1,000 crore in FY2025-26 — than manufacturing and electronics manufacturing services firms, for whom the threshold is ₹10,000 crore.
3. Indian brands are eligible for an additional incentive of 3% on eligible sales for product design and research and development.
4. Incentive claims arising from the design and research and development component are appraised and sanctioned by NITI Aayog.
Which of the statements given above is/are correct?
- The scheme explicitly targets the creation of Indian-owned brands with Indian design and Indian intellectual property, and not merely contract assembly for foreign brands.
- Indian-brand applicants qualify at a lower turnover threshold — ₹1,000 crore in FY2025-26 — than manufacturing and electronics manufacturing services firms, for whom the threshold is ₹10,000 crore.
- Indian brands are eligible for an additional incentive of 3% on eligible sales for product design and research and development.
- Incentive claims arising from the design and research and development component are appraised and sanctioned by NITI Aayog.
- A. 1 and 4
- B. 1, 2 and 3
- C. 2 and 4
- D. 3 only
Q10. The Phased Manufacturing Programme, notified in 2017 and often described as the starting point of India's mobile handset manufacturing shift, refers to which one of the following?
- A. A graded duty structure making progressively deeper local manufacture of handset sub-assemblies commercially attractive over time
- B. A staggered release of production-linked incentive claims across successive years of an approved applicant's scheme tenure
- C. A phased licensing framework for approving electronics manufacturing clusters in successive tranches across the states
- D. A phased lowering of import tariffs on fully assembled handsets in order to align India with its multilateral trade commitments
Q11. Consider the following statements about India's mobile phone production and export performance in the period immediately preceding the notification of the Mobile Phone Manufacturing Scheme:
1. In the first five months of FY2025-26, smartphone exports crossed ₹1 lakh crore, about 55% higher than in the corresponding period of the previous year.
2. Smartphones were India's top exported category in calendar year 2025, with overseas shipments worth about $30 billion.
3. India is the world's largest manufacturer of mobile phones by volume.
4. Mobile phone production in India was expected to reach about $75 billion by the end of FY2025-26.
Which of the statements given above is/are correct?
- In the first five months of FY2025-26, smartphone exports crossed ₹1 lakh crore, about 55% higher than in the corresponding period of the previous year.
- Smartphones were India's top exported category in calendar year 2025, with overseas shipments worth about $30 billion.
- India is the world's largest manufacturer of mobile phones by volume.
- Mobile phone production in India was expected to reach about $75 billion by the end of FY2025-26.
- A. 1 and 3
- B. 2, 3 and 4
- C. 1, 2 and 4
- D. 3 and 4