India’s $2.7B Electronics Bet to Cut China Dependency
India’s ₹22,919 crore PLI scheme aims to slash electronics imports, deepen local value chains, and boost manufacturing jobs.
India’s $2.7B Electronics Bet to Cut China Dependency
A bold push to transform India from assembler to innovator
In a decisive move to strengthen its place in the global tech supply chain, the Indian government has rolled out a new ₹22,919 crore ($2.7 billion) Production-Linked Incentive (PLI) scheme targeting electronic components—a strategic sector where India still leans heavily on imports, particularly from China.
This fresh policy, notified on April 8, 2025, is not just a continuation of past efforts—it’s a pivot. While earlier PLI schemes successfully brought in smartphone giants and boosted large-scale assembly lines, they left a glaring gap: the manufacturing of the nuts and bolts—the very components that power modern electronics. The new Electronics Components Manufacturing Scheme (ECMS) is India’s clearest attempt yet to close that gap.
Strengthening the Core: From PCBs to Power Units
India’s component manufacturing sector has long lagged behind due to limited domestic capability in producing subassemblies like Printed Circuit Boards (PCBs), Surface-Mount Device (SMD) passives, and Li-ion cells. These aren’t just parts—they’re the lifeblood of devices ranging from smartphones and laptops to electric vehicles.
Under the new PLI scheme, the government is offering performance-linked incentives across critical components such as capacitors, resistors, magnetics, inductors, connectors, and high-tech capital equipment. This is a crucial step toward creating a more integrated electronics ecosystem—one that doesn’t just assemble but innovates and produces from the ground up.
Policy with Purpose: Incentives Tied to Real Impact
This isn’t a blanket subsidy. The new framework adopts a rigorous, first-come, first-served model, prioritizing companies that meet strict global turnover thresholds in electronics manufacturing. Incentives are capped at 50% of the eligible investment, signaling a balanced approach that rewards merit while safeguarding public funds.
One standout feature is the mandate for full sub-assembly completion in key categories like display and camera modules. Localization targets vary across component types, offering flexibility while nudging companies to gradually deepen their domestic value chains. For technologies like Li-ion cells or PCBs, the policy allows time for skill development and tech transfer—acknowledging the complexity of the transition.
A Global Gameplan: Welcoming Joint Ventures and Tech Transfer
Recognizing the steep learning curve in advanced component fabrication, the government has opened the door wide for joint ventures with global firms. These partnerships can unlock high-end manufacturing capabilities in areas like substrate development, chip packaging, and next-gen PCBs.
According to Nikit Popli, Partner at KPMG India, “Allowing foreign participation through JVs is a strategic masterstroke. It encourages technology infusion while creating jobs and upskilling local talent. India’s capacity isn’t just being expanded—it’s being upgraded.”
Such collaborations are vital if India wants to match giants like Taiwan, South Korea, or China—nations that dominate the component and semiconductor value chain.
From Importer to Exporter: A Vision Backed by Numbers
Despite the growth in electronics exports, India still imports nearly 70% of its components, mostly from China. That’s a glaring vulnerability. But the ECMS scheme is designed to shift that balance. As per the Ministry of Electronics and IT, it is expected to draw over ₹59,000 crore in investments and enable production worth ₹4.56 lakh crore over six years.
And this isn’t just about numbers. Nearly 91,600 direct jobs are projected to emerge from this initiative, alongside a deeper pool of technical expertise and a stronger domestic supplier network.
This strategic shift is timely. With global supply chains fragmenting due to geopolitical risks and tariff wars, multinationals are hunting for alternatives. India—if it plays its cards right—could become a reliable, scalable, and democratic counterweight in global electronics manufacturing.
Conclusion: Building Beyond Assemblies—Toward Innovation
India’s latest PLI push isn’t merely about reducing import bills—it’s about reshaping the narrative. With strategic incentives, progressive localization rules, and a clear embrace of global collaboration, the country is carving a new path: from being the world’s factory floor to becoming its design lab and innovation center.
The journey won’t be instant. But with consistent policy support and industry cooperation, India can rise from assembling devices to mastering the components that power them—and eventually, to creating the technologies of tomorrow.
Disclaimer:
This article is a journalistic reinterpretation of publicly available policy announcements. It is intended for informational purposes only and does not constitute financial or investment advice. Please consult official government documents or professionals for specific guidance.
source :The Times of India