The Union Cabinet on Friday approved Electronics Component Manufacturing Scheme (ECMS) with a funding of ₹22,919 crore. The scheme is aimed at making the country self-reliant in the passive electronics supply chain with a total investment of ₹59,350 crore from manufacturers. It plans to generate production of ₹4.56 lakh crore and provide direct employment opportunities for around one-lakh people.
The latest Scheme marks a significant development in the electronics ecosystem. The industry has been advocating for a separate PLI scheme for non-semiconductor components since the launch of the semiconductor PLI Scheme approval in December 2021.
Capacity Building
The Scheme, which will be valid for the next six years, is designed to develop a robust passive component (non-semiconductor electronics like resistors, capacitors, inductors) ecosystem by attracting large investments (global/domestic) in electronics component manufacturing ecosystem, increasing domestic value addition (DVA) by developing capacity and capabilities, and integrating Indian companies with global value chains (GVCs), Ashwini Vaishnaw, Minister of Electronics and IT, said.
The Scheme will also allow companies to set up their facilities anywhere in the country, based on their preference. Vaishnaw said the notification for the Scheme will be issued within the next two weeks.
Incentive Structure
Vaishnaw explained that there will be three components of the incentives — employment-linked incentives (distinct from existing PLI), capital subsidy: High Capex, low turnover segments to benefit — and incentives linked to production/ turnover.
“So, these are the three structures under which various components will form. We will be launching the scheme soon. Just as the Semiconductor PLI Scheme, which was launched within 15 days of its approval, we will launch this PLI scheme within a fortnight as well,” he told media here.
Vaishnaw also mentioned that the Indian electronics sector has grown by five times (CAGR of 17 per cent) over the past decade, from around ₹2 lakh crore to around ₹10 lakh crore in 2024, exports have surged six times (CAGR of 43 per cent) reaching around ₹2.4-lakh crore in 2024 and has generated around 25 lakh jobs.
He added that exports are expected to double in the next four years.
“We are grateful to the Ministry of Electronics & IT (MeitY) for creating an exceptional scheme which will serve to create jobs, expand MSME participation, and increase value addition in the electronics sector,” Pankaj Mohindroo, Chairman, India Cellular and Electronics Association, said.
“This comes at an opportune time, as the country has evolved its electronics manufacturing capabilities, and the next level of growth can now be powerfully driven by a robust component ecosystem...it will not only benefit the whole industry but also position India as the next powerhouse for electronics manufacturing in a comprehensive manner,” Gururaj, Managing Director, Optiemus Electronics, said.