India is set to witness a transformative boost in its electronics manufacturing ecosystem as the government prepares to roll out a fresh INR 22,919 crore incentive Electronics Component scheme under the Modified Scheme for Semiconductor and Display Fab Ecosystem. This initiative, confirmed by Union Minister Ashwini Vaishnaw, targets critical electronic components such as capacitors, resistors, inductors, and ferrite cores. Aimed at reducing import dependency and creating high-quality jobs, the scheme is expected to trigger over INR 1 lakh crore in investments and catalyze job creation for more than 6.8 lakh people. The move is a significant step in India’s ambition to become a global electronics manufacturing hub.
The electronics component segment in India has traditionally lagged behind in value addition, primarily due to reliance on imports. However, with increasing government interventions and policy-driven initiatives, the scenario is rapidly evolving. The upcoming scheme is tailored to support indigenous manufacturing of vital components used in consumer electronics, electric vehicles, and telecom infrastructure. The government is optimistic about clearing these proposals within the next 30 to 60 days.
This decision follows a series of measures to strengthen India’s position in the global semiconductor supply chain, including the INR 76,000 crore semiconductor scheme and the push for display fab and OSAT facilities. With the involvement of key ministries, including the Ministry of Heavy Industries and the Department of Telecom, the electronics component scheme is designed to integrate with existing policies to ensure comprehensive industry growth.
This major announcement underlines India’s strategic push to enhance self-reliance in electronics, reduce imports, and generate employment while attracting global investments. As stakeholders await detailed guidelines, the broader startup and manufacturing ecosystem anticipates a new era of domestic electronics component production with long-term benefits for India’s industrial landscape.
1. Indian Government’s Major Push for Electronics Manufacturing
India’s electronics manufacturing journey has seen a tectonic shift in recent years. However, the component ecosystem remained weak due to a lack of focused policy support. Now, Union Minister Ashwini Vaishnaw’s announcement of a new INR 22,919 crore scheme specifically targeting the electronics component sector marks a crucial inflection point.
This scheme falls under the Modified Scheme for Semiconductor and Display Fab Ecosystem and aims to support manufacturing of critical components like capacitors, resistors, inductors, and ferrite cores. These components are the bedrock of all electronics, including smartphones, laptops, electric vehicles, and telecom equipment.
The current production value of components in India stands at approximately INR 1.12 lakh crore. With this scheme, the government aims to double production by reducing dependence on imports and encouraging domestic innovation.
2. Key Highlights of the INR 22,919 Cr Scheme
The upcoming scheme is designed to facilitate technology transfer, create employment, and improve India’s global competitiveness in electronics. Here’s what makes it stand out:
2.1 Strategic Component Focus
The scheme zeroes in on essential components — capacitors, resistors, ferrite cores, diodes, transistors, and inductors. These are typically imported from countries like China, Taiwan, and Japan. Domestic manufacturing of these parts is vital to strengthening India’s supply chain resilience.
2.2 Investment Multiplier Effect
Minister Vaishnaw emphasized that this INR 22,919 crore scheme is likely to unlock investments exceeding INR 1 lakh crore. The proposal includes capital support for setting up or expanding factories, with eligibility based on technical parameters, global partnerships, and long-term market strategies.
2.3 Employment Potential
Electronics Component Scheme Set for Launch Soon. The government estimates the scheme will create direct and indirect employment for over 6.8 lakh individuals. Skilled labor demand will rise in manufacturing clusters, further supported by state-level skilling initiatives.
3. Fast-Track Proposal Clearance
To speed up industrial progress, the government plans to clear all incoming proposals within 30 to 60 days. This fast-tracking aligns with India’s ‘Ease of Doing Business’ policy.
Several firms are already in advanced stages of preparing their proposals, with support expected from multiple ministries, including the Department of Telecom and the Ministry of Heavy Industries. A streamlined process is expected to attract both global and domestic players.
4. Industry Impact and Strategic Importance
India imported INR 1.7 lakh crore worth of electronic components in FY2023. The country’s electronics manufacturing, led by giants like Apple, Foxconn, and Dixon Technologies, has so far relied heavily on these imports. The upcoming scheme will reduce this dependency significantly.
The component industry’s growth will support India’s goals in emerging sectors like electric mobility, industrial automation, and AI-enabled devices. For example, EVs require large volumes of power electronic components — the proposed scheme directly addresses this need.
5. Complementing Existing Schemes
This scheme complements the larger INR 76,000 crore semiconductor and display scheme. Combined, these efforts aim to make India a self-sufficient electronics ecosystem.
In March, the government approved three semiconductor fabrication units in Gujarat and Assam with partners like Tata Group, CG Power, and Micron Technology. Similarly, the new scheme will support component manufacturing in tier-2 and tier-3 cities to decongest industrial development.
6. Challenges Ahead for Effective Implementation
While the announcement has been widely welcomed, implementation remains key. Past delays in disbursal under schemes like PLI for smartphones have made startups and SMEs cautious.
To avoid similar pitfalls, the government must ensure:
6.1 Transparent Eligibility Criteria
Startups, MSMEs, and large players must clearly understand application processes, evaluation matrices, and funding disbursement timelines.
6.2 Focus on Infrastructure and Logistics
Manufacturing components require reliable power, logistics, and export support. Infrastructure readiness must parallel financial incentives.
6.3 Global Collaboration
Partnerships with global giants will bring best-in-class manufacturing standards and design innovation, essential for high-quality output.
7. Learning for Startups and Entrepreneurs
This massive scheme brings rich lessons for India’s startup ecosystem:
7.1 Identify Gaps in Domestic Manufacturing
Startups should explore underserved segments like passive components, testing and packaging, and quality assurance services.
7.2 Partner for Value Chain Integration
Collaboration with OEMs, research labs, and design firms can enable startups to offer turnkey solutions aligned with Make in India goals.
7.3 Explore Global Markets
By building IP and focusing on quality, Indian startups can become global suppliers of niche components — especially in EVs, IoT, and telecom.
8. Conclusion: A Milestone in India’s Electronics Journey
Ashwini Vaishnaw’s announcement reaffirms India’s resolve to reduce import dependence and become a global leader in electronics manufacturing. The INR 22,919 crore scheme is not just about subsidies — it’s about building a foundational industrial capability.
With its targeted focus, rapid execution timeline, and massive job potential, the initiative sets the stage for transformative change in India’s electronics ecosystem. Entrepreneurs, investors, and policymakers alike must seize this moment.
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