The Union Cabinet has approved the Electronics Component Manufacturing Scheme with a funding of Rs 229.19 billion to make India self-reliant in electronics supply chain. This scheme aims to develop a robust component 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).

The scheme also envisages to attract investment of Rs 593.50 billion, result in production of Rs 45.65 billion and generate additional direct employment of 91,600 people and many indirect jobs as well during its tenure.

Salient features of the scheme include:

  • The scheme provides differentiated incentives to Indian manufacturers tailored to overcome specific disabilities for various categories of components and sub-assemblies so that they can acquire technological capabilities and achieve economies of scale. The target segment covered under the scheme and nature of incentive offered are as under:
  1. The target segments encompassing sub-assemblies including display module sub-assembly and camera module sub-assembly would be covered under turnover linked incentive.
  2. Similarly, bare components including non-surface mount devices (non-SMD) passive components for electronic applications, electro-mechanicals for electronic applications, multi-layer printed circuit board (PCB), Li-ion cells for digital applications (excluding storage and mobility) and enclosures for mobile, IT hardware products and related devices) would also be a part of turnover linked incentive.
  3. Further, selected bare components including high-density interconnect (HDI)/ modified semi-additive process (MSAP)/ flexible PCB and SMD passive components would be a part of hybrid incentive.
  4. Meanwhile, supply chain ecosystem and capital equipment for electronics manufacturing including parts/components used in manufacturing of sub-assembly and bare components and capital goods (all mentioned above) used in electronics manufacturing including their sub-assemblies and components would be a part of capex incentive.
  • The tenure of the scheme is six years with one year of gestation period.
  • Pay-out of a part of the incentive is linked with employment targets achievement.