The Government of India has recently launched the Electronics Components Manufacturing Scheme (ECMS) to strengthen its electronics manufacturing sector. This initiative aims to make India a global hub for electronics by promoting local production of passive components. The scheme was approved by the Cabinet with a funding allocation of ₹22,919 crore. It is designed to attract investments and enhance domestic value addition over the next six years.
Objectives
The primary goal of the ECMS is to develop a robust ecosystem for passive electronic components. This includes resistors, capacitors, and inductors. The scheme aims to integrate Indian manufacturers into global value chains. It also seeks to increase the domestic production capacity and capabilities. The government envisions a self-reliant supply chain for passive electronics.
Incentive Structures
The ECMS features three types of incentives.
- Employment-linked incentives (ELI) will promote job creation.
- Capital subsidies will focus on high capital expenditure and low turnover segments.
- Incentives based on production and turnover will encourage higher output.
These measures aim to encourage a competitive environment for component manufacturing.
Growth of Electronics Exports
India’s electronics exports have shown remarkable growth. In FY25, smartphone exports surpassed ₹2 lakh crore. The iPhone alone contributed approximately ₹1.5 lakh crore. The electronics manufacturing sector has seen production grow five-fold and exports increase six-fold over the past decade. This growth reflects India’s evolving role in the global electronics market.
Phases of Electronics Manufacturing Growth
India’s electronics manufacturing has progressed through three distinct phases. Initially, the focus was on importing finished goods. This was followed by sub-assembly production. Currently, the industry is entering the deep component manufacturing phase. This transition marks enhancement in value addition and self-reliance.
Sectoral Impact
The ECMS is designed as a horizontal initiative. It aims to benefit multiple sectors, including consumer electronics, automotive, and medical devices. This broad approach is expected to create a multiplier effect across the economy. The scheme will also support the design and manufacturing of capital equipment essential for electronics production.
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