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Union Cabinet Approves Electronics Component Manufacturing Scheme
The Union Cabinet, chaired by PM Narendra Modi, has approved the Electronics Component Manufacturing Scheme with an allocation of Rs.22,919 crore. The initiative aims to strengthen India’s electronics supply chain and promote self-reliance in component manufacturing.
The scheme focuses on attracting large-scale investments from both domestic and global manufacturers. It is enhancing domestic value addition (DVA) by developing local manufacturing capacity and capabilities. Furthermore, integrating Indian companies into Global Value Chains (GVCs) to boost exports and competitiveness.
Benefits of the Scheme
The scheme is projected to attract investments of Rs.59,350 crore, enabling production worth Rs.4,56,500 crore. It will create 91,600 direct jobs, along with a significant number of indirect employment opportunities.
Key Features of the Electronics Component Manufacturing Scheme
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The scheme offers differentiated incentives to Indian manufacturers, addressing specific challenges across various categories of components and sub-assemblies.
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The incentives aim to develop technological capabilities, achieve economies of scale, and enhance global competitiveness in electronics manufacturing.
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Targeted segments under the scheme will receive tailored support to strengthen India’s role in the global electronics industry.
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S.No.
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Target segments
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Nature of Incentive
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A
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Sub-assemblies
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1
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Display module sub-assembly
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Turnover-linked incentive
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2
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Camera module sub-assembly
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B
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Bare components
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3 |
Non-Surface Mount Devices (non-SMD) passive components for electronic applications
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Turnover-linked incentive
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4
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Electro-mechanicals for electronic applications
applications
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5 |
Multi-layer Printed Circuit Board (PCB)
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6
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Li-ion Cells for digital applications (excluding storage and mobility)
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7
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Enclosures for Mobile, IT Hardware products and related devices
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C
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Selected bare components
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8
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High-density interconnect (HDI)/ Modified semi-additive process (MSAP)/ Flexible PCB
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Hybrid incentive
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9
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SMD passive components
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D
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Supply chain ecosystem and capital equipment for electronics manufacturing
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10
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Parts/components used in the manufacturing of sub-assembly (A) and bare components (B) & (C)
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Capex incentive
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11
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Capital goods used in electronics manufacturing, including their sub-assemblies and components
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The scheme will be implemented over six years, including a one-year gestation phase.
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A portion of the incentive will be linked to the achievement of employment targets.
Pankaj Mohindroo, Chairman, ICEA, shared his views about the Electronics Component Manufacturing Scheme cleared by the Union Cabinet on March 28, 2025 -
“We are deeply grateful to the Ministry of Electronics & IT (MeitY) for its leadership for 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 USD 500 billion electronics manufacturing and exports hub.
As India scales its production to reach USD 500 billion to deepen the electronics manufacturing ecosystem and increase domestic value addition, this policy will usher in a new era of growth. It represents the Hon’ble Prime Minister’s vision to establish India as a global electronics manufacturing and export hub.
As we embark on the road to build a USD 500 billion mission, it is critical to build a sustainable and competitive electronics manufacturing ecosystem.
India has witnessed an unprecedented growth in the mobile and electronics sector. Domestic production has increased 400% to an estimated USD 135-140 billion over the last decade since FY15. The ECMS will now catalyse the industry to deepen integration with Global Value Chains (GVCs), establish large-scale manufacturing units, and enable significant employment generation.
ICEA believes India’s electronics manufacturing industry has built a substantial scale, becoming the 2nd largest mobile manufacturing nation in the world, producing approximately USD 60 billion in the current fiscal year. It is profoundly encouraging to see forward-looking and visionary efforts by the Government to bring in necessary investments, create jobs, skilling, and enhance capacity across the domestic supply chain. The entire electronics manufacturing space will galvanise, leading to a competitive and robust ecosystem in India.”
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