India’s Electronics Leap Begins

The Ministry of Electronics and Information Technology (MeitY) has approved the first batch of projects under the Electronics Component Manufacturing Scheme (ECMS), marking a new chapter in India’s electronics manufacturing journey.

The approved seven projects involve a committed investment of ₹5,532 crore and are expected to generate ₹36,559 crore worth of electronic components, while creating over 5,100 direct jobs.

These projects cover a range of critical components including printed circuit boards (PCBs), high-density interconnect (HDI) PCBs, camera modules, copper-clad laminates, and polypropylene films all essential to modern electronic devices.

Geographic Spread and Strategic Focus

Out of the seven approved projects, five are located in Tamil Nadu, one in Andhra Pradesh, and one in Madhya Pradesh. This distribution highlights the rise of southern India as a manufacturing hub for electronics components.

The initiative aims to reduce India’s import bill by ₹18,000–₹20,000 crore over time by localizing production of parts that are currently sourced from abroad.

What ECMS Aims to Achieve

The ECMS is designed to shift India’s role in the electronics value chain—from a country assembling finished devices to one that manufactures the key parts and sub-assemblies inside them.

The scheme provides a mix of turnover-linked, capex-linked, and hybrid incentives to encourage companies to manufacture sub-assemblies and bare components locally. Applications for the scheme opened on May 1, 2025, through an online portal, and these seven approvals mark the first phase of implementation.

Why This Move Matters

1. Moving Up the Value Chain

India is no longer satisfied with assembling imported kits. By producing high-value components domestically, the country adds real value to its exports and reduces vulnerability to global supply disruptions.

2. Cutting Import Dependence

Critical components like multilayer PCBs and camera modules are currently imported in large volumes. ECMS aims to replace these imports with local production, improving India’s trade balance.

3. Building the Ecosystem

The initiative complements existing policies such as the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing and the India Semiconductor Mission, creating a cohesive electronics ecosystem.

4. Regional Development

The concentration of projects in Tamil Nadu and nearby states could turn the region into a component manufacturing cluster, driving local employment and infrastructure growth.

Impact on Sectors and Markets

• Component Manufacturers: Gain from policy clarity and rising domestic demand.

• Consumer Electronics and Smartphone Firms: Lower import dependency and improved supply reliability.

• Export-Oriented Manufacturers: Stronger upstream ecosystem enhances global competitiveness.

• Logistics and Supply Chain Players: Growth in manufacturing will boost warehousing, tooling, and related services.

• Investors: Companies tied to “Make in India – Electronics Components” may become a new market theme.

Challenges Ahead

While approvals are a big step, success depends on execution.

• Timely Commissioning: Plants must start production quickly to realize the scheme’s impact.

• Technology Standards: Local players must meet global benchmarks in quality and reliability.

• Cost Competitiveness: Without efficient cost structures, imports could still dominate.

• Global Demand Fluctuations: Export-linked growth may face headwinds from global market slowdowns.

• Ecosystem Completeness: India must still build out testing, packaging, and design capabilities to sustain long-term growth.

The Bottom Line

The first seven ECMS approvals are more than just policy announcements they represent a structural shift in India’s electronics strategy. With ₹5,532 crore in investments and ambitious production targets, India is laying the foundation for a robust, globally competitive component manufacturing base.

If execution matches intent, ECMS could reshape how electronic components are designed, made, and sourced not just in India, but for the world.

Sources

Moneycontrol

News On AIR press release

The Economics Times