Union Cabinet's Approval for Electronics Manufacturing Scheme
The Union Cabinet has approved a ₹22,919 crore scheme to boost domestic manufacturing of electronics components, including display and camera modules, lithium-ion cells, and more. The initiative aims for a production value of ₹4.56 trillion with investments totaling ₹59,350 crore.
Key Features of the Scheme
- Scope: Includes manufacturing of resistors, capacitors, inductors, transformers, and other components vital for devices like mobile phones, laptops, and tablets.
- Job Creation: The scheme is projected to generate 91,600 direct jobs.
- Incentive Approach:
- Incentives will be provided based on the number of direct jobs created.
- Support for capital expenditures incurred by companies.
- Incentives tied to the company's turnover.
- Exports: Electronics is one of the top three exported goods from India, with exports expected to double from the current ₹2.5 trillion within four years.
Government Initiatives and Reforms
- India Semiconductor Mission: The scheme supports semiconductor manufacturing and finished products under the Production-Linked Incentive (PLI) scheme.
- Customs and Labor Reforms: Additional reforms in these areas are in progress, alongside tax reforms announced in the Union Budget 2025-26.
Growth in Electronics Manufacturing
Electronics manufacturing in India has grown at a Compound Annual Growth Rate (CAGR) of 17% over the past decade, reaching ₹9.52 trillion by the end of FY24. Electronics exports have also increased at a 20% CAGR, reaching ₹2.41 trillion during the same period.
Future Prospects
- Aims to complete the trifecta of semiconductor manufacturing, component manufacturing, and finished product assembly.
- The PLI scheme, launched in 2020, and the semiconductor chip scheme in 2021, are parts of this broader strategy.
- A second version of the India Semiconductor Mission is expected to launch soon.
Fact Sheet
- Electronics parts production scheme may attract ₹59,350 crore in investments.
- Production worth ₹4.56 trillion is anticipated.
- May generate 91,600 direct jobs.
- Firms will receive incentives based on job creation, capital expenditure, and turnover.
- Exports are projected to double in the upcoming years from the current ₹2.5 trillion.
