New Delhi: The Union Cabinet has approved a production-linked incentive (PLI) scheme for electronic components with an allocation of Rs 22,919 crore on 28 March.
This is the first program designed especially to encourage the production of non-semiconductor electronic components in India.
It is anticipated that the scheme will attract an estimated Rs 59,350 crore in investment and directly employ about 91,600 people. The PLI initiative will span six years and serve a number of industries, including the power sector, telecom, consumer electronics, automotive and medical devices, according to Union Electronics and IT Minister Ashwini Vaishnaw.
It is also estimated that the scheme will enable production valued at Rs 4.56 lakh crore.
Additionally, Vaishnaw emphasised India’s advancements in capital goods and equipment used in the production of electronics, highlighting the nation’s progress in this area. He mentioned important manufacturing centres that are developing in Bangalore, Pune, Coimbatore, and Rajkot. Furthermore, Apple now has 64 Indian suppliers, which reflects the expanding electronics industry.
Industry Experts
Welcoming the Cabinet’s decision, Pankaj Mohindroo, Chairman of the India Cellular & Electronics Association (ICEA), expressed gratitude to the Ministry of Electronics & Information Technology (MeitY) for its leadership in shaping a transformative policy.
“We are deeply grateful to MeitY for its leadership in creating an exceptional scheme which will serve to create jobs, expand MSME participation, and increase value addition in the electronics sector. This announcement ushers in a new era and represents the Honourable PM’s vision to transform India into a $500 billion electronics manufacturing and exports hub.”
Mohindroo further highlighted India’s significant progress in mobile and electronics production, noting that domestic production has surged by 400 per cent to an estimated $135-140 billion over the last decade since FY15.
“The ECMS will now catalyse the industry to deepen integration with GVCs, establish large-scale manufacturing units, and enable significant employment generation,” he added, emphasizing that India has become the world’s second-largest mobile manufacturing nation, with production reaching approximately $60 billion this fiscal year.
Anurag Awasthi, a policy specialist in semiconductors and critical electronics, stressed the complexity and importance of electronic components manufacturing in enhancing India’s position in global supply chains.
“Electronic Components Manufacturing is a highly complex sector that encompasses a diverse array of component types, intricate supply chains, and specialized manufacturing processes. It is well-established that component manufacturing plays a crucial role in enhancing value addition within the country and facilitating integration into Global Value Chains (GVCs).”
He further noted that investments in this sector require longer gestation periods before profitability is realized, making government support essential.
“By nurturing a thriving component manufacturing sector, India can ensure that its electronics manufacturing landscape remains competitive and capable of driving substantial job creation in the long run. This scheme, approved by the Union Cabinet today will be a harbinger in advancing India’s technological as well as economic development towards the one-trillion-dollar digital economy.”
Echoing similar sentiments, A. Gururaj, Managing Director of Optiemus Electronics, described the decision as a timely intervention that will propel India’s electronics industry into its next phase of growth.
“The Government’s decision for approving the Electronics Component Manufacturing Scheme is a welcome step and will act as a great impetus for the electronics manufacturing industry in India. This comes at an opportune time, as the country has evolved its electronics manufacturing capabilities, and the next level of growth can now be powerfully driven by a robust component ecosystem.”
Gururaj also pointed out that the policy’s impact will extend beyond manufacturing, positively influencing trade balance and employment generation.
“Moreover, it has immense potential to positively impact India’s trade balance, generate employment opportunities, and promote a greater participation of our youth in creating the electronics ecosystem. Optiemus group, one of the leading electronics manufacturers, is committed to contributing to further the growth of the electronics sector in India by bringing manufacturing of key components such as Display Module, Camera Module, and Mechanics in collaboration with leading global suppliers.”
The ECMS is expected to create a ripple effect across the electronics industry by attracting fresh investments, fostering technological advancements, and ensuring that India’s electronics manufacturing sector remains globally competitive. Industry stakeholders believe that this initiative will not only elevate India’s domestic production capabilities but also position the country as a formidable player in the global electronics market.
As India scales up its production capabilities to achieve its ambitious target of $500 billion in electronics manufacturing, experts anticipate that the ECMS will play a crucial role in driving sustainable growth, boosting employment, and establishing India as a key hub in the global electronics value chain.
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