Strengthening the Electronics Manufacturing Supply Chain in India
The Indian Cabinet has sanctioned a ₹23,000-crore initiative aimed at bolstering the electronics manufacturing supply chain. This move is designed to capture a larger market share by leveraging the 'China Plus One' strategy, while also creating job opportunities.
Electronics Component Manufacturing (ECM) Scheme
- Duration: Spread over six years.
- Investment Generation: Expected to attract ₹60,000 crore in investments.
- Production Output: Anticipated to produce ₹4.57 lakh crore worth of goods.
- Employment: Aims to create 91,600 direct jobs and additional indirect employment.
The scheme offers differentiated incentives tailored to various component categories to foster technological capabilities and economies of scale. It includes a one-year gestation period with incentives linked to job creation, turnover, and capital expenditure.
Focus Areas
- Passive component and sub-assembly manufacturing, particularly capital goods or machinery.
- Complements active component manufacturing under the ₹76,000 crore India Semiconductor Mission (ISM).
Industry Response
Industry leaders, such as Atul Lall of Dixon Tech and Hitesh Garg of NXP Semiconductors, welcomed the initiative. They highlighted its potential to enhance value addition, reduce costs, and position India as a key player in the global electronics system design and manufacturing (ESDM) landscape.
Expected Outcomes
- Accelerated innovation in automotive, industrial, and IoT applications.
- Improved competitiveness in serving global value chains with efficient local supply.
- Enhanced competitiveness in the total cost of goods due to government incentives addressing cost disabilities.
Minister Ashwini Vaishnaw cited the example of a printed circuit board (PCB) to illustrate the scheme's benefits, emphasizing the integration of various components domestically to significantly enhance value addition.
Incentive Structures
- Display and camera module sub-assemblies will receive turnover-linked incentives.
- Bare components like non-SMD passive components, electro-mechanicals, multi-layer PCBs, Li-ion cells, and enclosures for mobile and IT hardware will also be incentivized based on turnover.