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The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Electronics Component Manufacturing Scheme with a budget allocation of ?22,919 crore. The initiative aims to make India self-reliant in the electronics supply chain by fostering a robust component ecosystem through large-scale investments from both global and domestic players.
The scheme is designed to enhance domestic value addition (DVA), build technological capabilities, and integrate Indian companies into global value chains (GVCs). It is projected to attract investments worth ?59,350 crore, generate electronic product output valued at ?4,56,500 crore, and create approximately 91,600 direct jobs, along with numerous indirect employment opportunities.
A key feature of the scheme is its differentiated incentives, which are customized to address the challenges faced by various categories of electronic components and sub-assemblies. The incentives are turnover-linked for sub-assemblies like display modules and camera modules, as well as bare components such as non-surface mount device (non-SMD) passive components, electro-mechanicals, multi-layer printed circuit boards (PCBs), lithium-ion cells (excluding storage and mobility), and mobile and IT hardware enclosures.
Additionally, a hybrid incentive model will apply to select components, including high-density interconnect (HDI) or modified semi-additive process (MSAP) flexible PCBs and surface mount device (SMD) passive components. Capital expenditure incentives will also be available for the supply chain ecosystem, covering parts and components used in sub-assemblies, bare components, and capital goods for electronics manufacturing.
The scheme has a tenure of six years, including a one-year gestation period. A portion of the incentive will be contingent on achieving employment targets, further promoting job creation in the sector.
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