The central government has formally rolled out a landmark Rs 22,919 crore scheme aimed at bolstering the domestic production of electronics components, marking a critical shift in its electronics manufacturing strategy.
Announced on 8 April by the Ministry of Electronics and Information Technology (MeitY), the six-year-long Electronics Component Manufacturing Scheme (ECMS) is designed to deepen India’s value chain by incentivizing the production of key components and subassemblies.
The notification comes shortly after the Union Cabinet cleared the plan late last month, signaling the government’s focus on moving beyond final assembly to core electronics component manufacturing.
With India now assembling the bulk of smartphones sold domestically, officials say the next logical step is to build a robust ecosystem for parts like camera modules, display assemblies, printed circuit boards, and lithium-ion cells (excluding EV-specific cells).
Under the scheme, eligible companies can avail themselves of turnover- and capital-expenditure-linked incentives ranging from 1 per cent to 10 per cent, based on the year of investment and the type of electronics components.
For instance, firms producing electro-mechanical parts, multi-layer PCBs, lithium-ion cells and device enclosures will receive 6 to 8 per cent incentives in the first year, tapering down to 3 to 5 per cent by the final year.
Manufacturers of capital goods and bare components will receive a one-time 25 per cent capex subsidy, provided they invest a minimum of Rs 10 crore.
A unique feature of the scheme is a 1 per cent employment-linked incentive. If companies fall short of the targeted job creation, this amount will be deducted from their total benefits.
Sub-assembly makers, particularly in modules like displays and cameras, are eligible for 4 to 5 per cent in turnover-based support, although this will reduce incrementally from the third year onward.
Union Electronics and IT Minister Ashwini Vaishnaw said that while India’s domestic value addition in electronics manufacturing stands at 18 per cent today, the goal is to double it by 2030.
“Even advanced countries like China average around 38 per cent due to the global dispersion of supply chains. We aim to bridge this gap,” he noted.
Smartphone Exports Hit Record Rs 2 Lakh Crore in FY25
Coinciding with the ECMS announcement, the government also celebrated a milestone in smartphone exports, which crossed Rs 2 lakh crore for the first time in FY2024–25, a 54 per cent increase over the previous fiscal.
Calling it a “historic feat,” Union Minister Vaishnaw took to the social media platform to share that the spike in exports is a direct result of the Production-Linked Incentive (PLI) scheme launched under the Make in India initiative.
Industry experts note that this performance has exceeded expectations. The India Cellular and Electronics Association (ICEA) had projected smartphone exports at around Rs 1.68 lakh crore for the year, a figure India comfortably surpassed.
The surge highlights India’s strengthening foothold in the global electronics manufacturing value chain.
Apple remains the single largest contributor to these exports, accounting for nearly 70 per cent of shipments. Foxconn’s facility in Tamil Nadu alone shipped out nearly half of India’s iPhones, growing its exports by 40 per cent year-on-year.
Meanwhile, Tata Electronics has solidified its position in the sector through its acquisition of a majority stake in Pegatron’s Tamil Nadu unit and Wistron’s Karnataka plant, with Indian-made iPhones expected to soon reach US shores.
As India sharpens its focus on electronics component production and job creation within the sector, officials say this two-pronged strategy, driving exports while expanding domestic manufacturing depth, could make the country a globally competitive hub for electronics in the coming decade.
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