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Cabinet okays Rs 48,000-cr. plan for electronics manufacturing

Electronics manufacturing

Approx Read Time: 5 minutes
Electronics manufacturing

In News:

  • The Union Cabinet has approved three new schemes to boost large-scale electronics manufacturing in India.
  • The three schemes together will enable large-scale electronics manufacturing, a domestic supply chain ecosystem of components and a state-of-the-art infrastructure and common facilities for large anchor units and their supply chain partners.

Objective of the schemes:

  • The schemes are aimed at boosting investments in the critical electronics segment while positioning India as a global manufacturing hub to counter countries like China and Vietnam.

Significance of the Schemes:

  • The schemes are expected to attract new investments worth at least ₹50,000 crore in the sector.
  • It will also generate more than five lakh direct and 15 lakh indirect jobs.

About the Schemes:

The production-linked incentive scheme:

  • The scheme proposes production linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components including Assembly, Testing, Marking and Packaging (ATMP) units.
  • It will offer an incentive of 4-6% on incremental sales of goods manufactured in India.
  • Domestic value addition for mobile phones is expected to rise to 35-40% by 2025 from the current 20—25% due to the impetus provided by the scheme.
  • It has been provided a budgetary outlay of ₹40,995 crore for five years.


  • The scheme has a direct employment generation potential of over 2,00,000 jobs over 5 years.
  • It would lead to large scale electronics manufacturing in the country and open tremendous employment opportunities.
  • Indirect employment will be about 3 times of direct employment as per industry estimates.
  • Thus, the total employment potential of the scheme is approximately 8,00,000.

Scheme for Promotion of Manufacturing of Electronics Components and Semiconductors:

  • The scheme will provide financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products such as electronic components, semiconductor/ display fabrication units, among others.
  • The outlay has been kept at ₹3,285 crore over eight years and is expected to create about 6 lakh jobs.


  • The proposal when implemented will lead to the development of electronic components manufacturing ecosystem in the country.
  • Following are the expected outputs/outcomes in terms of measurable indicators for the scheme:
    1. Development of electronic components manufacturing ecosystem in the country and deepening of Electronics value chain.
    2. New investments in Electronics Sector to the tune of at least Rs. 20,000 crore.
    3. Direct employment of approximately 1,50,000 is expected to be created in the manufacturing units supported under the scheme, including indirect employment of about three times of direct employment as per industry estimates. Thus, total employment potential of the scheme is approximately 6,00,000.
    4. Reducing dependence on import of components by large scale domestic manufacturing that will also enhance the digital security of the nation.

Electronics Manufacturing Clusters (EMC) 2.0:

  • Modified Electronics Manufacturing Clusters (EMC2.0) Scheme will develop world class infrastructure along with common facilities and amenities through Electronics Manufacturing Clusters (EMCs).
  • It is expected that these EMCs would aid the growth of the ESDM sector, help development of entrepreneurial ecosystem, drive innovation and catalyze the economic growth of the region by attracting investments in the sector, increasing employment opportunities and tax revenues.
  • It aims at creating quality infrastructure with a minimum area of 200 acres along with industry-specific facilities such as common facility centers, ready-built factory sheds/ plug-and-play facilities.
  • The scheme will provide financial help up to 50% of the project cost, subject to ceiling of Rs 70 crore per 100 acres of land for setting up of electronics manufacturing cluster projects.
  • The Cabinet approved a budgetary outlay of Rs 3,762 crore, to be given over a period of 8 years.
  • The scheme is expected to create about 10 lakh jobs.

Also Read: Cabinet: Bulk drug parks’ promotion scheme

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