In News:

The Ministry of Electronics and Information Technology (MeitY) has notified the Electronics Components Manufacturing Scheme (ECMS) in April 2025. It marks a strategic step in India’s ambition to become a global electronics manufacturing hub.

Key Highlights of ECMS

• Objective: To incentivize domestic production of passive electronic components and capital equipment, thus deepening India's electronics manufacturing value chain.
• Scheme Tenure: Valid for 6 years, with a 1-year gestation period.
• Focus Components: Includes resistors, capacitors, relays, switches, speakers, connectors, inductors, special ceramics, and other passive components.
  • Active components are supported separately under the India Semiconductor Mission (ISM).
• Incentive Structure:
  • Turnover-linked incentive (based on incremental revenue).
  • Capex-linked incentive (for investments in plant and machinery).
  • Hybrid model (combining turnover and capex benefits).

Incentive rates range between 1–10%, varying by year and component type.

• Employment Mandate: All applicants—whether component manufacturers or capital equipment makers—must commit to job creation, ensuring broader socio-economic benefits.

Strategic Importance

• Horizontal Sectoral Impact: The scheme is designed to support multiple sectors including automotive, consumer electronics, medical devices, power electronics, and electrical grids, promoting cross-industry multiplier effects.
• Support for Tooling & Capital Equipment Industry: Encourages design and manufacture of capital tools and machinery required for electronics production, in line with models seen under the India Semiconductor Mission.
  • Global firms like Linde have begun operations, with more in pipeline.

India’s Electronics Growth Trajectory

• Export Milestone (FY 2024–25):
  • Total smartphone exports: ?2 lakh crore
  • iPhone exports alone: ?1.5 lakh crore
• Sectoral Growth (Last Decade):
  • 5x growth in production.
  • 6x growth in exports.
  • Export CAGR: >20%
  • Production CAGR: >17%
• Manufacturing Base Expansion: Over 400 production units (large and small) now manufacture a wide range of electronic components domestically.
• Value Chain Evolution: India has transitioned from assembling finished goods → sub-assemblies → deep component manufacturing, now entering a value-added, self-reliant phase in electronics