Government of India has launched the guidelines and portal for the Electronics Component Manufacturing Scheme (ECMS) to strengthen the domestic electronics component ecosystem and attract large-scale global and domestic investments. The scheme was approved by the Union Cabinet chaired by the Prime Minister.
About ECMS
Aim:
- Develop a robust electronics component ecosystem.
- Attract large global/domestic investments.
- Increase Domestic Value Addition (DVA) by building capacity and capabilities.
- Integrate Indian companies into Global Value Chains (GVCs).
Scheme Tenure & Budget:
- Tenure: 6 years (FY 2025–26 to FY 2031–32) including 1-year gestation period.
- Budget Outlay: ₹ 22,919 crore.
Focus Area
- First dedicated PLI scheme for passive electronic components such as resistors, capacitors, speakers, microphones, special ceramics, relays, switches, connectors.
Incentive Structure
The scheme offers three types of differentiated fiscal incentives:
- Turnover-linked incentive: based on incremental revenue.
- Capex-linked incentive: for investments in plants and machinery.
- Hybrid incentive: a combination of turnover-linked and capex-linked.
Incentive range: 1% to 10% depending on component type and year.
Employment Linked: Incentives are linked with employment generation for both component manufacturers and capital equipment producers.
Comprehensive Coverage:
- The scheme not only incentivizes components and subassemblies but also covers: Capital equipment (machinery used in manufacturing) and Subassembly of manufacturing equipment.
- Promotes a complete supply chain ecosystem, ensuring integration across manufacturing stages.
Expected Outcomes
- Investment expected: ₹59,350 crore.
- Production target: ₹4,56,500 crore.
- Direct employment generation: 91,600 jobs, with additional indirect employment.
ECMS is designed as a horizontal scheme, benefiting sectors beyond electronics, including automobile, power, and industrial sectors.
Unique Aspects
- First-ever hybrid incentive model linking incentives directly with employment generation.
- Incentives allocated on a first-come, first-served basis, promoting timely and efficient participation.
- Emphasizes performance-based incentives with strong focus on ease of doing business and compliance simplification.
Significance
- Aims to position India as a global electronics hub with a complete manufacturing ecosystem.
- Expected to boost domestic capacity, reduce import dependence, and strengthen supply chain resilience.
- Marks a shift from finished goods assembly to deeper component and material-level manufacturing.
Electronics Manufacturing in India
India progressed from finished product assembly to module-level manufacturing, then to component manufacturing and finally to material manufacturing.
- Finished goods account for 80–85% of the electronics value chain.
- Production growth: 5-fold increase in electronics production.
- Export growth: More than 6-fold increase; CAGR of exports >20%, CAGR of production >17%.
- India is now the 2nd largest mobile manufacturing country globally.
- Future focus on design capability and quality excellence to drive India’s global leadership in electronics.