Electronics Components Manufacturing Scheme

• 04 Feb 2026

Source: PIB  

Why in News?  

The Union Budget 2026–27 has significantly bolstered India’s ambition to become a global technology leader by increasing the outlay for the Electronics Components Manufacturing Scheme (ECMS) to Rs 40,000 crore, aligned with the goal of building a USD 500-billion domestic electronics manufacturing ecosystem by 2030–31. 

What are the Key Facts About Electronics Components Manufacturing Scheme? 

• ECMS: Launched in April 2025 by the Ministry of Electronics and Information Technology (MeitY), it aims to build a self-sustaining electronics component ecosystem by attracting domestic and global investment  across the value chain by integrating its domestic electronic industry with the Global Value Chains (GVCs). 
• Incentive Structure: The ECMS provides turnover-linked, capex-linked, or hybrid fiscal incentives, with a portion of both turnover and capex incentives linked to employment generation.  
  • Incentives will be given on a first-come, first-served basis to firms ready for early production.  
• Tenure: ECMS has a six-year tenure with a one-year gestation period for the Turnover Linked Incentive, while the Capex Incentive is available for a five-year period. 
• Target Segments: It focuses on sub-assemblies such as camera modules and display units, bare components including multi-layer PCBs, capacitors, and resistors, and capital equipment used in electronics factories, together accounting for nearly 90% of the Bill of Materials (BoM) for mobile phones. 
• Surplus Investment Interest: As of December 2025, the ECMS attracted Rs 1.15 lakh crore in investment commitments, which is double the initial target of Rs 59,350 crore. 
• Projected Economic Outcomes: ECMS is expected to generate Rs 10.34 lakh crore over six years and create 1.41 lakh direct jobs and several lakh indirect opportunities. 
  • Positions electronics as India’s potential second-largest export item, following a six-fold production increase in the last decade. 
• Synergy with ISM 2.0: The ECMS acts as a horizontal enabler, working alongside the India Semiconductor Mission (ISM) 2.0 to build a comprehensive ecosystem covering materials, equipment, and advanced packaging. 

Electronics as an Export Powerhouse of India 

• Electronics Growth: According to the Economic Survey 2025–26, electronics is now India’s third-largest and fastest-growing export category, up from seventh place in 2021–22. 
  • In the first half of FY26, electronics exports touched USD 22.2 billion, putting the sector on track to become India’s second-largest export category. 
  • Electronics production has witnessed a six-fold increase, rising from Rs 1.9 lakh crore in 2014–15 to Rs 11.3 lakh crore in 2024–25. 
  • India is currently the world's second-largest mobile phone manufacturer, with production skyrocketing 28-fold over the last decade. 
• Employment Generation: The electronics sector has created 25 lakh jobs in the past 11 years. 

Supporting Policy Framework 

• Production-Linked Incentive (PLI) Scheme: It covers 14 sectors and nearly 70% of the USD 4 billion FDI in electronics since 2020 is attributed to PLI beneficiaries. 
  • The sector has also benefited from allowing 100% foreign direct investment in electronics manufacturing, subject to applicable laws and regulations. 
• Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme:  Focuses on creating world-class infrastructure through Modified Electronics Manufacturing Clusters. 
• Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS): Provides a 25% financial incentive on capital expenditure for high-value electronic components. 
• National Policy on Electronics (NPE) 2019: The overarching National Policy on Electronics aiming to position India as a global hub for Electronics System Design and Manufacturing (ESDM). 
• Fiscal Incentives: The Union Budget 2026-27, announced Basic Customs Duty (BCD) exemptions for microwave oven inputs and Social Welfare Surcharge exemptions for electronic toy parts.

Frequently Asked Questions (FAQs) 

1. What is the Electronics Components Manufacturing Scheme (ECMS)? 
ECMS is a MeitY scheme launched in April 2025 to build a self-sustaining electronics components ecosystem through turnover- and capex-linked incentives.

2. What is the tenure and incentive structure of ECMS? 
It has a six-year tenure with a one-year gestation for turnover-linked incentives and five years for capex incentives, partly linked to employment generation.

3. Which segments are targeted under ECMS? 
Sub-assemblies, bare components, and capital equipment that together form nearly 90% of the mobile phone Bill of Materials.

4. Why is ECMS important for exports and jobs? 
It is expected to generate over ₹10 lakh crore in output, create 1.41 lakh direct jobs, and help electronics emerge as India’s second-largest export category.

5. How does ECMS complement other electronics policies? 
It works alongside PLI, ISM 2.0, EMC 2.0, SPECS, and NPE 2019 to strengthen the entire electronics and semiconductor value chain.

UPSC Civil Services Examination, Previous Year Question (PYQ)  

Prelims:

Q. ‘R2 Code of Practices’ constitutes a tool available for promoting the adoption of (2020)

(a) environmentally responsible practices in electronics recycling industry

(b) ecological management of Wetlands of International Importance under the Ramsar Convention

(c) sustainable practices in the cultivation of agricultural crops in degraded lands

(d) ‘Environmental Impact Assessment’ in the exploitation of natural resources

Ans: (a)