Electronics Component Manufacturing Scheme

March 29, 2025

On March 28, 2025, the Union Cabinet of India approved the Electronics Component Manufacturing Scheme. This initiative is backed by a substantial budget of ₹22,919 crore. The scheme aims to enhance India’s electronics manufacturing capabilities, focusing on the production of crucial electronic components. It represents step in the government’s ongoing efforts to establish a robust electronics manufacturing ecosystem.

Objectives of the Scheme

The primary objective is to increase Domestic Value Addition (DVA) in electronics. The government aims to boost DVA from 20% to 40% within five years. This will be achieved by promoting the local manufacturing of passive and active components. The scheme focuses on sub-assemblies and bare components, which are essential for producing finished electronic products.

Investment and Economic Impact

The scheme is expected to attract ₹59,350 crore in investments. It aims to generate production worth ₹4,56,500 crore and create 91,600 direct jobs. The initiative will also lead to numerous indirect employment opportunities. This economic growth is crucial for India’s goal of becoming self-reliant in the electronics sector.

Incentive Structure

Unlike previous schemes based on production-linked incentives, this scheme links incentives to factory turnover and employment creation. Manufacturers will receive differentiated incentives tailored to various categories of components. This approach is designed to help overcome specific challenges faced by manufacturers.

Target Segments

The scheme covers several target segments, including sub-assemblies and bare components. Key components include display modules, camera modules, non-Surface Mount Devices (non-SMD), and lithium-ion cells. The focus on these segments is intended to encourage innovation and technological advancement within the industry.

Focus on Capital Goods

The scheme also emphasises the production of capital goods. These are essential for manufacturing components and sub-assemblies. The growth in finished goods has increased the demand for capital goods, creating opportunities for manufacturers in regions such as Coimbatore and Bengaluru.

Implementation Timeline

The scheme is set to run for six years, with a one-year gestation period. The government has yet to specify the allocation of funds across various categories. Details will be clarified upon the scheme’s official launch, anticipated in the coming weeks.

Strategic Importance

Electronics is a rapidly growing industry with global trade. The sector’s expansion is vital for India’s economic and technological development. Over the past decade, domestic production of electronic goods has surged, denoting the potential for further growth and innovation.

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