India announces Rs 23,000-Crore Electronics Components Manufacturing Scheme to improve Domestic Manufacturing

In a key policy initiative, the Indian government has announced elaborate guidelines for the Rs 23,000-crore Electronics Components Manufacturing Scheme (ECMS) to drastically increase domestic value addition in electronics manufacturing in the next six years, The Economic Times said.

Union Electronics and Information Technology Minister Ashwini Vaishnaw said companies with good indigenous design strength and 'six sigma' quality compliance will be given priority. Companies without in-house design centers run the risk of being "left out" of the "phenomenal change" that will transform India's electronics industry.

The applications will be filed through an online portal from 1 May 2025. The Union Cabinet, headed by Prime Minister Narendra Modi, had cleared the ECMS last month to bring large domestic and international investments, strengthen manufacturing ecosystems, and connect Indian companies to Global Value Chains (GVCs).

1. Krishnan, a Secretary in the Electronics Ministry, pointed out that the scheme's launch coincides with international geopolitical shifts that can redefine supply chains. Krishnan estimated that India's share of global electronics manufacturing can increase from the present 3 per cent to 8 per cent over six years.

The ECMS is aimed at new investment of Rs 59,350 crore, generation of 91,600 direct employment, and estimated production worth Rs 4,56,500 crore. Incentives will be offered on turnover and capital expenditure basis, subject to the component category produced. Employment generation too will be incentive-linked.

The following products are eligible under the scheme: sub-assemblies like display and camera modules, core components like multilayer PCBs and lithium-ion cells, as well as certain bare components and supply chain critical equipment. The timelines for applications are different: three months for sub-assemblies and bare components, and two years for supply chain infrastructure and capital equipment categories.

Atul Lall, Managing Director and Vice Chairman of Dixon Technologies, ratified the firm's intention to invest heavily in at least four component categories under the scheme.

Industry insiders emphasized the need to enter into international partnerships and establish strong alliances with Indian states in order to intensify the impact of the scheme.

Union Minister Vaishnaw further reported that India's electronics manufacturing increased five times and exports six times in the last decade, producing an annual production of over Rs 11 lakh crore (approx. $129 billion). Production is expected at $300 billion by 2026 and at $500 billion by 2030-31.

Independently, Bengaluru-based Sarvam AI was declared the first startup to be selected to create an indigenous base model under the Government's IndiaAI Mission, another strategic step towards enhancing technological self-reliance.

Speaking on ECMS, Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), said, "We expect states to compete fiercely to attract investments, just as the mobile phone industry grew to a $62 billion base."

Ashok Chandak, SEMI India and India Electronics and Semiconductor Association (IESA) President, termed the ECMS as "key to enhancing component manufacturing and synergizing with the India Semiconductor Mission."

The scheme defines clear investment levels by component category, providing turnover-linked incentives for investments of Rs 50 crore to Rs 500 crore, along with additional capital expenditure incentives for selected groups.