India’s Electronics Manufacturing Gets A Boost With New Scheme

The Indian government has approved the Electronics Component Manufacturing Scheme (ECMS), a Rs 22,919 crore initiative aimed at bolstering the domestic production of non-semiconductor components.

This scheme, which focuses on passive components, will play a critical role in India’s growth as a global electronics manufacturing leader.

A Historic Move For India’s Electronics Industry

The ECMS has a target of attracting Rs 59,350 crore in investments, which will contribute to a staggering Rs 4,56,500 crore in production.

The scheme is set to create direct employment for 91,600 people, along with numerous indirect jobs over its six-year tenure.

With a one-year gestation period, it will drive long-term growth for India’s electronics sector.

According to ELCINA, India produced non-semiconductor components worth USD 13 billion in 2022, and it expects production to reach USD 20.7 billion by 2026 and USD 37 billion by 2030.

However, India will face a projected deficit of USD 248 billion, which it has been meeting largely through imports.

The new scheme aims to reduce this deficit by encouraging local production and providing incentives for various segments, including sub-assemblies, bare components, and SMD passive components.

Key Segments Of The Scheme

The ECMS will target components such as display modules, camera modules, Li-ion cells, electro-mechanical parts, and multi-layer PCBs, among others.

These areas will receive turnover-linked incentives, with selected components like High-Density Interconnect (HDI) and Flexible PCBs also benefiting from hybrid incentives.

The scheme’s focus will be on expanding the domestic ecosystem and enhancing India’s integration into Global Value Chains (GVCs).

Electronics industry leaders have lauded the scheme as a game-changer.

Rajoo Goel, Secretary General of ELCINA, called it an essential step towards creating a robust component ecosystem and positioning India as a global manufacturing hub.

Ajai Chowdhry, founder of HCL, highlighted the scheme’s potential to increase value addition, attract investments, and support local manufacturing, which will, in turn, generate significant employment opportunities.

Employment & Economic Growth

The scheme is expected to create jobs at various manufacturing levels and strengthen the competitiveness of India’s workforce.

Moreover, experts like Pankaj Mohindroo from the India Cellular & Electronics Association (ICEA) emphasize the importance of building a sustainable and competitive electronics manufacturing ecosystem to ensure long-term growth.

The government’s proactive steps to support local manufacturing have already fueled the growth of India’s electronics sector.

In fact, India’s domestic production of electronic goods has surged from Rs 1.90 lakh crore in FY 2014-15 to Rs 9.52 lakh crore in FY 2023-24.

Furthermore, the ECMS will accelerate this growth, position India as a powerhouse in electronics manufacturing, and reduce the trade deficit in electronics components.

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