Cabinet Approves Electronics Component Manufacturing Scheme Worth Rs 22,919 Crore

The Union Cabinet approved the Electronics Component Manufacturing Scheme with a funding of Rs 22,919 crore to make India Atmanirbhar in the electronics supply chain.

During a press briefing on Friday, Union Minister Ashwini Vaishnaw announced that this scheme aims to develop a robust component ecosystem by attracting large investments, both global and domestic, in the electronics component manufacturing ecosystem.

It will also increase domestic value addition or DVA, by developing capacity and capabilities and integrating Indian companies with global value chains or GVCs.

Vaishnaw shared that the tenure of the scheme is six years with one year of gestation period. "Payout of a part of the incentive is linked with employment targets achievement," he said.

The scheme aims to attract investment of Rs 59,350 crore and result in production of Rs 4,56,500 crore. Vaishnaw highlighted that this 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 schemes cover target segments like sub-assemblies, bare components, selected bare components; and supply chain ecosystems and capital equipment for electronic manufacturing.

Under sub-assemblies, both the display module sub-assembly and the camera module sub-assembly will get a turnover-linked incentive.

Under Bare components— 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 (excluding storage and mobility) and enclosures for mobile, IT hardware products and related devices to get a turnover-linked incentive.

Select bare components—high-density interconnect or modified semi-additive process or MSAP will get hybrid incentive. While flexible PCBs and SMD passive components also get hybrid incentives.

While the supply chain ecosystem and capital equipment for electronics manufacturing – parts used in the manufacturing of sub-assembly, bare components and select bare components to get a capex incentive.

Additionally, capital goods used in electronics manufacturing, including their sub-assemblies and components, will also get Capex incentives.