Electronic components manufacturing scheme

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Picture Courtesy: PIB

Context:

Union Budget 2026 – 27 increased the outlay for the Electronics components manufacturing scheme to Rs. 40000 crores.

Electronics components manufacturing scheme:

The Electronics Components Manufacturing Scheme is a Government of India initiative notified on 8 April 2025 to strengthen domestic manufacturing of electronic components, deepen value addition, and integrate India into global electronics value chains.

Objective: ECMS seeks to build a self-sustaining electronics component ecosystem in India by reducing import dependence, increasing domestic value addition, and integrating Indian industry into global value chains.

Incentive Structure: The scheme provides financial incentives to manufacturers of electronic components, sub-assemblies, and related materials to encourage large-scale investment, higher domestic value addition, and technology-led manufacturing.

Tenure: ECMS has a duration of six years with an optional one-year gestation period for project implementation.

Target Segments: The scheme supports manufacturing of multi-layer PCBs, camera modules, connectors, oscillators, optical transceivers, enclosures for mobile and IT hardware, and other key electronic components and sub-assemblies.

Employment generation: The scheme is projected to create 1,41,801 direct jobs, in addition to a large number of indirect employment opportunities across the electronics value chain.

Linkages with other schemes: ECMS functions alongside the Production Linked Incentive Scheme, the Modified Electronics Manufacturing Clusters, the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, and the National Policy on Electronics to create a comprehensive electronics manufacturing ecosystem

Current Status of Electronics Components Manufacturing Scheme (ECMS):

• CMS has attracted investment commitments worth ₹1.15 lakh crore, nearly double the original target of ₹59,350 crore, showing robust industry interest.
• Across all phases, 46 ECMS applications have been approved in 11 states, with a cumulative approved investment of ₹54,567 crore and projected direct employment of 51,000 people.
• ECMS-backed projects are expected to jointly produce goods worth ₹3.67 lakh crore by approved applicants.
• ECMS is projected to yield about ₹11,156 crore in investment, ₹29,024 crore in production, and about 19,240 new jobs as more units begin operations.
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Picture Courtesy: PIB

Significance of the Electronics Components Manufacturing Scheme (ECMS):

• Strengthens domestic value addition: ECMS promotes local manufacturing of critical electronic components, helping India move beyond simple assembly to deeper value addition within the country.
• Reduces import dependence: By incentivising production of key components that were largely imported earlier, the scheme improves supply chain resilience and reduces vulnerability to global disruptions.
• Boosts global value chain integration: The scheme positions India as a reliable manufacturing base for global electronics brands by enabling domestic firms to supply components for international markets.
• Supports semiconductor ecosystem growth: ECMS complements initiatives such as the India Semiconductor Mission by building downstream component capacity that is essential for a complete electronics and semiconductor ecosystem.
• Enhances export competitiveness: With stronger domestic component availability, Indian manufacturers can produce finished electronics more competitively, boosting exports and improving the trade balance.

Conclusion:
The Electronics Components Manufacturing Scheme marks a strategic shift toward deeper domestic value addition in India’s electronics sector by strengthening component manufacturing, reducing import dependence, and enhancing integration with global value chains, thereby supporting long-term industrial growth and the vision of India emerging as a global electronics manufacturing hub.

Source: PIB