Why in the news?

  • Union Electronics and IT Minister Shri Ashwini Vaishnaw announced the approval of the first tranche comprising seven projects under the Electronics Components Manufacturing Scheme (ECMS).

Electronics Component Manufacturing Scheme (ECMS)

  • What is it?:
    • These projects aim to strengthen India’s electronics components materials manufacturing capacity (e.g., PCBs, camera modules, copper-clad laminates, polypropylene films). 
    • The move aligns with India’s objective of transitioning from assembling end-products to manufacturing modules, components, materials and machinery in the electronics value chain.
  • Objectives:
    • To develop a robust electronics component manufacturing ecosystem in India.
    • Attract large global and domestic investments across the electronics value chain.
    • Enhance domestic value addition in electronic components manufacturing.
    • Integrate India’s electronics industry with global value chains.
  • Key Features:
    • Implementation: Launched in April 2025 by the Ministry of Electronics and Information Technology (MeiTY).
    • Financial Outlay: ₹22,919 crore
    • Scheme Duration: 6 years with one year optional gestation period (FY 2025-26 to FY 2031-32).
    • Implemented through a nodal Project Management Agency (PMA) under MeiTY.
  • Target Segments:
    • Subassemblies (e.g., display modules, camera modules)
    • Bare components (e.g., multilayer printed circuit boards – PCBs)
    • Selected bare components (e.g., flexible printed circuit boards)
    • Supply chain ecosystem and capital equipment for electronics manufacturing
  • Incentive Structure:
    • Turnover-linked incentives (on incremental turnover/sales) for sub-assemblies and bare components
    • Capex-linked incentives (on eligible capital expenditure) for supply chain ecosystem and capital equipment
    • Hybrid incentives (both turnover and capex linked) for selected bare components
    • Incentives contingent on employment generation
    • Distributed on a first-come, first-served basis
  • Significance:
    • Import-dependency reduction: By enabling production of high-value components that are currently largely imported, India strengthens its domestic supply chain.
    • Higher value-chain capture: The shift from assembling finished goods to manufacturing components and materials helps move India up the value chain in electronics manufacturing.
    • Skill development & job creation: The initiative would create higher-skilled manufacturing and R&D jobs rather than only low-end assembly jobs.
    • Strategic & defence relevance: Trusted supply chains for electronics components are critical for defence, telecom, EVs, renewable energy, the domains with strategic importance.
    • Regional development: Spread of projects beyond the traditional hubs indicates a drive for balanced industrial growth.- e.g., Madhya Pradesh.
    • Global export push: With ~60% production envisaged for export, India’s electronics manufacturing ecosystem is being positioned for both domestic and global supply.
    • Policy ecosystem complementarity: Complements other initiatives like the Production Linked Incentive (PLI) scheme for electronics, and the India Semiconductor Mission (ISM), thereby creating an end-to-end electronics manufacturing ecosystem.
  • Challenges:
    • Execution challenge: Translating approved investment into commissioned production with timelines, technology transfer, required skills, and infrastructure quality remains key.
    • Supply chain resilience: While import dependency is targeted to reduce, managing raw-material sourcing, logistics, energy access, and ecosystem linkages will determine success.
    • Skill ecosystem readiness: The high-skill jobs anticipated will require upskilling/reskilling programmes, industry–academia linkages, and regional skill hubs.
    • Regional infrastructure: For States like Madhya Pradesh (with fewer established electronics clusters), availability of utilities, connectivity and ecosystem partners needs attention.
    • Demand articulation: Ensuring offtake (both domestic and export) is necessary; aligning component production with downstream manufacturers (smartphones, EVs, renewables) will be important.
    • Monitoring & evaluation: Robust mechanisms to track the pace of implementation, job creation, export realisation, and import substitution will ensure policy effectiveness.