Electronics Components Manufacturing Scheme (ECMS)

Why in the News?

• The Ministry of Electronics and Information Technology (MeitY) has approved 22 additional projects under the Electronics Components Manufacturing Scheme (ECMS).
• These projects involve a total investment of ₹41,863 crore and are expected to generate large-scale production and employment.
• The approvals are part of the government’s broader strategy to strengthen India’s electronics supply chain and reduce import dependence, especially in electronic components.

Basics about Electronics Components Manufacturing Scheme (ECMS)

• The Electronics Components Manufacturing Scheme (ECMS) is a flagship incentive scheme of the Government of India aimed at promoting domestic manufacturing of electronic components, sub-assemblies, and capital equipment.
• It focuses on addressing the weakest link in India’s electronics value chain, which has historically been component manufacturing.
• The scheme seeks to reduce India’s dependence on imported electronic components, particularly from East Asian economies.
• It is implemented by the Ministry of Electronics and Information Technology (MeitY).
• The scheme was approved by the Union Cabinet in 2024 and notified in April 2025, with a total financial outlay of ₹22,919 crore.
• The overall tenure of the scheme is six years, including a one-year gestation period, while certain incentives have a shorter duration.

Objectives and Strategic Vision of ECMS

• ECMS aims to build a robust and resilient domestic electronics component ecosystem.
• It seeks to attract both global and domestic investments across the electronics value chain.
• The scheme focuses on integrating India’s electronics industry with Global Value Chains (GVCs).
• It supports the national vision of Atmanirbhar Bharat by encouraging local sourcing and value addition.
• In the long term, ECMS contributes to India’s ambition of building a $500 billion electronics manufacturing ecosystem by 2030–31.

Key Features and Incentive Structure

• Targeted Component Coverage
  • The scheme primarily focuses on passive electronic components such as resistors, capacitors, speakers, microphones, connectors, switches, relays, and special ceramics.
  • Sub-assemblies like display modules and camera modules are also covered.
  • Capital equipment and supply chain ecosystem components are included to support manufacturing depth.
  • Active components such as semiconductors are excluded and are covered separately under the India Semiconductor Mission (ISM).
• Segment-Based Structure
  • Segment A covers sub-assemblies such as display modules and camera modules.
  • Segment B focuses on bare components, including electro-mechanicals, printed circuit boards, and lithium-ion cells.
  • Segment C includes selected advanced components, such as HDI and flexible printed circuit boards.
  • Segment D targets the supply chain ecosystem and capital equipment.
  • Segment E focuses on telecom-related sub-assemblies.
• Differentiated Incentive Models
  • A turnover-linked incentive is provided for Segments A, B, and E, linked to incremental sales over a period of six years.
  • A capex-linked incentive is provided for Segment D, with a tenure of five years.
  • A hybrid incentive model, combining both turnover and capex incentives, is applied to Segment C.
  • Incentive rates generally range from 1 percent to 10 percent, depending on the product segment.
• Performance-Based Approach
  • Incentives are linked to incremental production, investment, and employment generation.
  • Early movers are rewarded to accelerate ecosystem development.

Highlights of the Newly Approved 22 Projects

• Scale and Coverage
  • The approvals form the third tranche under ECMS, covering 11 target electronic component segments.
  • The projects span eight states, namely Andhra Pradesh, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh, and Rajasthan.
• Investment and Output
  • The projects involve ₹41,863 crore of investment.
  • They are expected to generate production worth approximately ₹2.58 lakh crore over the scheme period.
• Employment Generation
  • Around 34,000 direct jobs are expected from these projects.
  • At the scheme level, ECMS is expected to generate about 91,600 direct jobs, along with significant indirect employment.
• Sectoral Applications
  • The components manufactured will support mobile phones, telecom equipment, consumer electronics, strategic and defence electronics, automotive electronics, and information technology hardware.

Significance for India’s Electronics Industry

• ECMS strengthens component-level manufacturing, which has been a critical bottleneck in India’s electronics sector.
• It enhances Domestic Value Addition (DVA), reducing reliance on imported inputs.
• The scheme improves India’s integration with Global Value Chains, making exports more competitive.
• It supports indigenous research and development and promotes quality and design capabilities.
• By complementing schemes like PLI for Electronics and the India Semiconductor Mission, ECMS creates a holistic electronics manufacturing ecosystem.

Background – India’s Electronics Manufacturing

• India’s electronics production has grown from ₹1.9 lakh crore in 2014–15 to ₹11.3 lakh crore in 2024–25, reflecting a six-fold increase.
• India has emerged as the world’s second-largest mobile phone manufacturer.
• Electronics became India’s third-largest and fastest-growing export category in 2024–25.
• Electronics exports increased from ₹38,000 crore in 2014–15 to ₹3.27 lakh crore in 2024–25.
• ECMS plays a critical role in sustaining this growth by deepening the manufacturing base beyond final assembly.