India’s Electronics Boom: PLI Schemes & Infra Fueling Growth
India’s electronics manufacturing industry is undergoing a major transformation, driven by strategic government interventions. Central to this progress are Production Linked Incentive (PLI) schemes and robust infrastructure development plans aimed at building a resilient and competitive domestic ecosystem.
To reduce import dependency, boost employment, and elevate India’s position in the global electronics value chain, the government has introduced several focused initiatives—most notably the PLI schemes and the Electronics Components Manufacturing Scheme (ECMS) with a budget of ₹23,000 crore. These efforts target not just finished products but also essential components and sub-assemblies.
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| PLI schemes and infrastructure push driving India's rise as a global electronics manufacturing powerhouse. |
PLI Schemes: Fueling India’s Electronics Growth
The PLI schemes form the backbone of India’s policy push to encourage domestic production across key sectors. For electronics, the PLI strategy rewards manufacturers for incremental sales and investments in Indian-made products. This multi-tiered model targets various segments to ensure growth across the value chain.
PLI for Large-Scale Electronics Manufacturing
Launched on April 1, 2020, this initiative focuses on attracting major investments in mobile phone production and electronic components. Eligible companies can earn incentives between 3% and 6% over five years, based on sales above a baseline.
As a result, India has rapidly evolved from a net importer to a net exporter of mobile phones. Domestic production surged from 5.8 crore units in FY 2014-15 to 33 crore units in FY 2023-24, significantly lowering reliance on imports.
PLI 2.0 for IT Hardware
Aimed at scaling up India’s capabilities in the IT hardware domain, this scheme provides an average 5% incentive on net incremental sales over six years. It covers products such as laptops, servers, tablets, and all-in-one PCs.
The policy also encourages localization of key components, including semiconductors, IC design, and packaging—pushing India toward self-reliance in core technologies.
Electronics Components Manufacturing Scheme (ECMS)
The ECMS delivers targeted support via turnover-based, capital investment-based, and hybrid models. It spans industries such as consumer electronics, automotive, telecom, medical devices, and power electronics.
Projections for ECMS are strong: ₹59,350 crore in investment, ₹4,56,500 crore in production output, and 91,600 direct jobs created. These numbers demonstrate the scheme’s wide-reaching impact on the Indian economy.
As of November 2024, total investments under various PLI schemes in 14 sectors reached ₹1.61 lakh crore, generating production worth ₹14 lakh crore and over 11.5 lakh jobs. In electronics specifically, global giants like Apple and Samsung have deepened their presence, while domestic firms like Dixon Technologies have significantly expanded their local operations.
Infrastructure Development: Strengthening the Base
Government efforts go beyond financial incentives. Infrastructure development is a core pillar in India’s manufacturing push, particularly through the creation of Electronic Manufacturing Clusters (EMCs) and improved logistics frameworks.
Electronic Manufacturing Clusters (EMC) Scheme
The EMC scheme supports the creation of advanced infrastructure for electronics design and manufacturing. Greenfield EMCs in undeveloped areas can access 50% of project costs (up to ₹50 crore per 100 acres), while brownfield clusters can receive 75% (also capped at ₹50 crore).
To date, 19 greenfield EMCs and 3 Common Facility Centres (CFCs) have been approved, covering over 3,464 acres with total government support of ₹1,470 crore. States such as Uttar Pradesh, Karnataka, and Tamil Nadu have become prominent electronics manufacturing hubs due to these clusters.
Enhanced Logistics and Connectivity
The success of electronics manufacturing also hinges on efficient logistics. National programs like Bharatmala, Sagarmala, and PM Gati Shakti aim to modernize transport infrastructure.
Improvements in ports, roadways, airports, and freight corridors are cutting transit times and reducing logistics costs. These developments are essential to positioning India as a competitive global manufacturing base.
The Impact: Redefining India’s Electronics Landscape
Rising Domestic Output and Lower Import Dependence
Schemes like ECMS aim to localize production of crucial components, thereby building supply chain resilience and reducing dependency on imports from China, Taiwan, and others.
Even partial localization of key inputs could save billions in foreign exchange and insulate the economy from global disruptions.
Employment Generation
The expansion of electronics manufacturing is a powerful job engine. ECMS alone is expected to create nearly 92,000 direct jobs. Indirect employment in supply chains, logistics, and support services is set to grow in parallel.
Export Growth Potential
India has set an ambitious goal of achieving $300 billion in electronics production by 2026, with exports contributing $120–140 billion. Enhanced local manufacturing and value addition will enable India to become a leading exporter of electronic goods.
Boosting R&D and Technological Innovation
PLI and ECMS encourage investment in semiconductor design, IC manufacturing, and R&D. Programs like the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) also push innovation and technological self-reliance.
India’s Road to Becoming a Global Electronics Hub
With consistent policy backing and strong industry participation, India is steadily progressing toward becoming a global center for electronics production. Interest from multinational corporations is growing, reinforcing the country’s potential.
Challenges to Address
Despite remarkable progress, key challenges remain:
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Supply Chain Vulnerabilities: India continues to import certain high-tech components. Building a fully localized and self-sufficient supply chain is essential.
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Infrastructure Gaps: Continuous improvements in logistics, electricity, and industrial support systems are necessary to handle large-scale manufacturing.
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Skilled Workforce Shortage: A growing electronics industry demands a trained and skilled workforce. Investment in vocational education and upskilling programs must continue.
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Regulatory Efficiency: Simplifying regulatory approvals and improving ease of doing business will be critical to attracting long-term investment.
Conclusion
The Indian government’s strategic initiatives—especially the PLI schemes and infrastructure development—are reshaping the country’s electronics manufacturing sector. These measures promise not only increased production and reduced import reliance but also strong job creation and export expansion.
With continued focus on innovation, infrastructure, and supply chain localization, India is on a clear path to becoming a dominant player in the global electronics ecosystem.
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