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Informist, Friday, Mar. 28, 2025

--Cabinet approves 229.19 bln outlay for PLI scheme in electronics component 

--Cabinet approves PLI scheme for electronics component sector 

NEW DELHI – The Cabinet on Thursday approved a scheme to promote the manufacturing of electronic components in India with a funding of INR 229.19 billion, Union Minister for Electronics, Information Technology, Railways, and Information & Broadcasting Ashwini Vaishnaw said at a press briefing. Unlike other schemes aimed at boosting local manufacturing, this scheme offers a blend of employment, production, and capital expenditure-linked incentives.

"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 government said in a press release. The scheme is expected to attract an investment of INR 593.50 billion with a potential production of INR 4.57 trillion worth of products.

The tenure of the scheme is six years. Through this scheme, the government hopes to generate direct employment for 91,600 persons. Currently 2.5 million people are employed in the electronics manufacturing segment, and the government is expecting it to hit 6 million in the coming years, Vaishnaw said.

Some segments of electronic component manufacturing have higher capital expenditure requirements but have lower turnover. For such schemes, there is a capital subsidy component. In addition, there is also a component of production-linked incentive, Vaishnaw told reporters.

Segments including the display module sub-assembly and camera module sub-assembly, the incentive would be turnover-linked. Similarly, production of non-surface mount devices, electro-mechanicals for electronic applications, multi-layer printed circuit boards, lithium-ion cells for digital applications, enclosures for mobile and hardware products will also be offered turnover-linked incentives. Crucially, incentives for lithium-ion cells will exclude those intended for storage and mobility.  

Manufacturing of parts and components used in the manufacturing of sub-assembly and bare components would be offered a capital expenditure incentive under the new scheme. In addition, production of capital goods used in electronics manufacturing will also be offered capital expenditure incentives. 

"This scheme aims to develop a robust component ecosystem by attracting large investments (global/domestic) in the electronics component manufacturing ecosystem, increasing Domestic Value Addition (DVA) by developing capacity and capabilities, and integrating Indian companies with Global Value Chains (GVCs)," according to the statement. 
 

Exports of electronic components from India emerged as a bright spot for the Narendra Modi government post-COVID pandemic. Vaishnaw highlighted that domestic production of electronic goods has increased to INR 9.52 trillion in 2023-24 (Apr-Mar) from INR 1.90 trillion in FY15.  End

Reported by Anand JC

Edited by Akul Nishant Akhoury

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