The Union Cabinet approved India’s pioneering Electronics Component Manufacturing Scheme (ECMS) with an investment of Rs 22,919 crore.
As part of this initiative, the scheme targets boosting the production of passive and non-semiconductor components, which are vital for India’s electronics industry.
In addition, this move is part of India’s broader strategy to reduce dependency on imports and establish a self-sustaining electronics ecosystem.
By focusing on local production, the scheme aims to strengthen the country’s position in the global electronics market while fostering economic growth.
Investment & Job Creation
The ECMS is expected to attract investments worth Rs 59,350 crore, leading to the production of Rs 4,56,500 crore and the creation of 91,600 direct jobs over its six-year tenure.
The scheme will also generate many indirect jobs, further strengthening India’s workforce and competitiveness in the global electronics market.
India produced non-semiconductor components worth USD 13 billion in 2022 and expects this figure to grow to USD 37 billion by 2030.
However, projections indicate a deficit of USD 248 billion in the next six years, primarily due to reliance on imports.
The ECMS aims to bridge this gap by supporting the local production of essential components, thereby reducing the trade deficit.
The scheme introduces several targeted incentives, including turnover-linked incentives for sub-assemblies like display modules and printed circuit boards, and capital expenditure-based incentives for companies investing in key components.
These measures aim to establish a robust local component ecosystem, integrate Indian companies into global value chains, and increase domestic value addition.
Industry Reactions
The approval of the ECMS has been warmly welcomed by industry leaders.
Ajai Chowdhry, Founder of HCL Technologies, called the scheme a ‘game-changer’ for India’s electronics manufacturing, emphasizing its potential to drive value addition and innovation.
Josh Foulger, President of electronics manufacturing services firm Zetwerk, also welcomed the scheme, highlighting its role in increasing value addition, fostering innovation, and creating employment opportunities in high-value electronics.
Long-Term Vision For India’s Electronics Sector
The government has set ambitious goals, aiming for a $500 billion electronics economy by 2030.
To achieve this vision, the ECMS will play a crucial role by boosting domestic production, creating jobs, and reducing India’s reliance on imports.
Moreover, through these efforts, India will not only strengthen its manufacturing capabilities but also become a global leader in electronics production, driving economic growth and fostering technological innovation.
Additionally, the cabinet’s approval of the ECMS marks a significant step in India’s journey towards becoming a major player in the global electronics manufacturing landscape.
By fostering local production, creating jobs, and addressing the trade deficit, this scheme promises long-term growth and sustainability for the sector.
Also Read: India’s Electronics Manufacturing Gets A Boost With New Scheme
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