The Union Cabinet has approved a ₹22,919 crore production-linked incentive (PLI) scheme aimed at strengthening India’s electronics supply chain. This initiative focuses on non-semiconductor electronics components and is expected to boost domestic manufacturing, reduce import dependence, and attract significant investments.
With an estimated investment of ₹59,350 crore, the scheme is projected to generate a total production output of ₹4,56,500 crore. Additionally, it is expected to create 91,600 direct jobs while also fostering numerous indirect employment opportunities over its six-year duration. The incentives under the scheme will be determined by both turnover and capital expenditure, with part of the payout also linked to employment generation.
The initiative will benefit various sectors, including electronics, telecom, consumer goods, medical devices, automobiles, and power. Union Minister of Electronics and Information Technology Ashwini Vaishnaw highlighted the country’s progress in electronics manufacturing over the past decade. “We are making very good progress in the semiconductor part of the value chain. We have achieved good success with PLI-based finished products manufacturing. Now we are covering subassemblies and bare components,” Vaishnaw stated.
India’s domestic electronics production has seen remarkable growth, rising from ₹1.9 lakh crore in 2014-15 to ₹9.52 lakh crore in 2023-24, with a compound annual growth rate (CAGR) exceeding 17%. Simultaneously, exports of electronic goods have grown from ₹0.38 lakh crore in 2014-15 to ₹2.41 lakh crore in 2023-24, achieving a CAGR of over 20%. Vaishnaw emphasized the importance of shifting from an import-substitution strategy to an export-driven growth model.
Industry leaders have welcomed the scheme. Ajai Chowdhry, founder of HCL and chairman of EPIC Foundation, remarked, “We have been requesting this for a long time. This will enable much higher value addition in the country for electronics manufacturing and will attract more investments in system products, as local availability will enable just-in-time manufacturing. Also, this will enable more companies and start-ups to design and make products to enable India to be an electronics product nation.”
He further noted that the employment-linked incentive aspect of the scheme would contribute to workforce expansion, enhance competitiveness, and drive economic development.
Despite progress in electronic manufacturing, India continues to import key components such as printed circuit boards (PCBs), passive components (capacitors, inductors, resistors), and display modules, which make up 15-20% of the bill of materials for electronic products, apart from semiconductors. Ashok Chandak, president of the India Electronics and Semiconductor Association, highlighted this challenge.
By focusing on core component manufacturing, the government aims to make India a self-reliant hub for electronics production while fostering economic growth and technological innovation.
