Why in news?
On 30 March 2026 the government approved 29 applications under the fourth tranche of the Electronics Component Manufacturing Scheme. These approvals are expected to bring investments of around ₹7,104 crore and create over 14,000 new jobs, giving a boost to India’s electronics manufacturing sector.
Background
The Electronics Component Manufacturing Scheme, announced in 2020, is the first dedicated production‑linked incentive (PLI) scheme targeting passive electronic components. It aims to develop a robust ecosystem for resistors, capacitors, inductors, speakers, microphones, relays, switches and connectors, which are essential building blocks for electronics. Strengthening local production reduces import dependence and supports sectors like automobiles, consumer electronics and communications.
Key features
- Types of incentives: Three incentive structures are offered—turnover‑linked, capital expenditure‑linked and a hybrid model combining both. Incentives range from 1 to 10 per cent depending on the year and component.
- Mandatory employment: Applicants must generate jobs, including in the production of capital equipment.
- Tenure: The scheme runs for six years with a one‑year gestation period for companies to set up facilities.
- Targeted scope: Focuses on passive components; active devices such as semiconductors are covered separately under the India Semiconductor Mission.
- Recent approvals: The fourth tranche encourages companies to invest in manufacturing resistors, capacitors, special ceramics, relays, switches and connectors, expanding domestic capacity.
Significance
- Building supply chains: Encourages domestic and foreign firms to establish production lines in India, fostering self‑sufficiency in critical components.
- Industrial growth: Generates employment, enhances skills and supports allied industries such as consumer electronics and electric vehicles.
- Integration with global markets: Meeting global standards enables Indian component manufacturers to participate in international supply chains and boost exports.
Conclusion
The Electronics Component Manufacturing Scheme is a strategic push to strengthen India’s electronics value chain. The approval of new investment proposals indicates industry confidence and signals progress toward a resilient and competitive manufacturing sector.
Source: The Economic Times