Powering The Subsequent Leap In Electronics

– Commercial –

Can India break away from its reliance on imported electronics and emerge as the subsequent international manufacturing big? The electronics part manufacturing scheme (ECMS) goals to make that leap attainable, backed by billions in incentives, bold targets, and a decent timeline. However the true query stays: Can India overcome entrenched challenges and reshape its electronics future?

India’s electronics sector is present process a structural shift, from assembling completed merchandise to constructing a self-reliant, globally aggressive manufacturing base. Home manufacturing has grown at over 15% CAGR (FY21-FY24), with exports touching US$35 billion in FY24. The federal government now targets US$500 billion in complete manufacturing by FY2030, together with US$150 billion in elements.

Nonetheless, the sector stays closely import-dependent, sourcing 80-85% of its elements—together with semiconductors and printed circuit boards (PCBs)—from Asia attributable to restricted native design and manufacturing capabilities. To handle this, India launched the Electronics Part Manufacturing Scheme (ECMS) in April 2025, its most bold initiative but, alongside different programmes like PLI, SPECS, and MSIPS. These schemes supply mixed central and state incentives exceeding 100% of the funding, via a mixture of subsidies and tax credit. The incentives, tailor-made to part classes and manufacturing fashions, purpose to scale back import reliance, appeal to funding, improve worth addition (at present simply 15-18%), and combine Indian corporations into international worth chains. Pushed by ‘Make in India’ and supported by a sturdy coverage framework, India is positioning itself as a key participant within the US$2900 billion international electronics market.

Why ECMS? The strategic want

Regardless of India’s emergence as a serious hub for electronics meeting, a staggering 70-80% of elements, resistors, capacitors, connectors, and extra, are nonetheless imported, largely duty-free below ITA-11. This heavy reliance inflates the import invoice, limits home worth addition, and exposes India to international provide chain shocks. The Covid-19 pandemic highlighted these vulnerabilities, as provide disruptions threatened the complete trade. The ECMS seeks to vary this dynamic by enabling India to transition from an assembler to a real manufacturing chief.

Scheme scale, scope, and ambition

The ECMS is designed to catalyse India’s electronics sector by attracting investments of ₹593.5 billion, reaching a focused manufacturing output of ₹4565 billion, and producing 91,600 direct jobs, with many extra anticipated not directly. The scheme is open to each greenfield (new) and brownfield (present) investments, masking a broad vary of segments, together with sub-assemblies, naked elements, chosen naked elements, the availability ecosystem, and capital tools.

ECMS provides three varieties of incentives to collaborating firms. The turnover-linked incentive is calculated as a share of incremental turnover over a base yr and is diminished by 1% if employment thresholds will not be met. This incentive is disbursed upon reaching particular gross sales or funding targets.

The small print are proven in Fig. 6.

The capex incentive is a share of capital expenditure, diminished by 5% if employment standards are unmet, and is disbursed after funding and the graduation of business manufacturing. A hybrid incentive combines each turnover-linked and capital expenditure (Capex) incentives for specified items, offering flexibility primarily based on the character of the funding and product phase.

Strategically, the scheme goals to scale back India’s import dependence, significantly on China, by strengthening home worth addition and integrating Indian corporations into international worth chains. The allocation of incentives operates on a first-come, first-served foundation, encouraging early participation.

There’s a sturdy emphasis on high quality and innovation, with necessities for design groups and adherence to Six Sigma high quality requirements; failure to conform might lead to exclusion from the scheme. The affect of ECMS extends past electronics, supporting the economic, energy, and automotive sectors. State governments additionally play a supportive position, with some, like Tamil Nadu, providing matching grants to amplify the central scheme’s affect. This collaborative method between central and state governments, coupled with worldwide partnerships, is predicted to additional broaden the electronics manufacturing ecosystem in India.

What does ECMS cowl?