The Union Cabinet chaired by Prime Minister Narendra Modi today approved the Electronics Component Manufacturing Scheme with a funding of ₹22,919 crore to make India Atmanirbhar in electronics supply chain.
A press release issued by the cabinet stated that 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 Electronics Component Manufacturing Scheme aims to attract investment of ₹59,350 crore, resulting in production of ₹4,56,500 crore. It is expected that the scheme will generate additional direct employment of 91,600 persons and many indirect jobs as well during its tenure.
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 include sub-assemblies of Display module and Camera module, bare components like 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, Enclosures for Mobile, IT Hardware products and related devices, High-density interconnect (HDI)/ Modified semi-additive process (MSAP)/ Flexible PCB, and SMD passive components.
The scheme further covers supply chain ecosystem and capital equipment for electronics manufacturing, which includes parts/components used in manufacturing of sub-assemblies and bare components, and Capital goods used in electronics manufacturing including their sub-assemblies and components.
The tenure of the scheme is six years with one year of gestation period. Payout of a part of the incentive will be linked with employment targets achievement.
The statement stated that electronics is one of the highest-traded and fastest-growing industries globally and is expected to play a pivotal role in shaping the global economy and advancing a country’s economic and technological development. Since electronics permeates all sectors of economy it has economic and strategic importance. With various initiatives of Gol, the electronics manufacturing sector has witnessed remarkable growth in the last decade. The domestic production of electronic goods has increased from Rs.1.90 lakh crore in FY 2014-15 to Rs.9.52 lakh crore in FY 2023-24 at a CAGR of more than 17%. The exports of electronic goods have also increased from Rs.0.38 lakh crore in FY 2014-15 to Rs.2.41 lakh crore in FY 2023-24 at a CAGR of more than 20%.
