The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Electronics Component Manufacturing Scheme, allocating Rs. 22,919 crore. This initiative aims to make India self-reliant in the electronics supply chain.
Objectives and Goals
The scheme focuses on attracting significant investments, both domestic and global, in electronics component manufacturing. It aims to develop a robust component ecosystem, increase domestic value addition (DVA) through enhanced capacity and capabilities, and integrate Indian companies with global value chains (GVCs).
Expected Benefits
- Investment of Rs. 59,350 crore is anticipated.
- Total production worth Rs. 4,56,500 crore is projected.
- The creation of 91,600 direct jobs and many indirect employment opportunities is expected.
Key Features
Incentives by Target Segment:
Sub-assemblies:
- Display module sub-assembly: Turnover-linked incentive.
- Camera module sub-assembly: Turnover-linked incentive.
Bare Components:
- Non-Surface Mount Devices (non-SMD) passive components.
- Electro-mechanical components.
- Multi-layer Printed Circuit Boards (PCBs).
- Li-ion cells for digital applications (excluding storage and mobility).
- Enclosures for mobile and IT hardware products.
Selected Bare Components:
- High-density interconnect (HDI) and flexible PCBs: Hybrid incentive.
- Surface Mount Device (SMD) passive components: Hybrid incentive.
Supply Chain and Equipment:
- Parts used in sub-assemblies and bare components: Capex incentive.
- Capital goods for electronics manufacturing: Capex incentive.
Scheme Duration:
Six years, including a one-year gestation period.
Employment-Linked Incentive:
A portion of the payout depends on employment targets being met.
Industry Overview
The government highlighted that electronics is one of the fastest-growing and highly-traded industries globally, with immense importance for economic and technological development. Electronics permeates all sectors and is considered both economically and strategically significant.
The press release stated that India’s electronics manufacturing has shown remarkable growth due to various government initiatives. Domestic production of electronic goods increased from Rs. 1.90 lakh crore in FY 2014-15 to Rs. 9.52 lakh crore in FY 2023-24, achieving a CAGR of over 17%. Exports also surged from Rs. 0.38 lakh crore to Rs. 2.41 lakh crore during this period, with a CAGR exceeding 20%.
Impact
The scheme is expected to enhance domestic value addition and strengthen India’s position in the global electronics industry.