Electronics component scheme gets Rs 40,000 crore boost to deepen India's manufacturing value chain

In a landmark announcement during the Union Budget presentation on February 1, 2026, Finance Minister Nirmala Sitharaman revealed a substantial increase in funding for the Electronics Component Manufacturing Scheme (ECMS), elevating its budget to an impressive ₹40,000 crore. This strategic move aims to enhance India's electronics manufacturing landscape, moving beyond mere assembly to create a robust domestic supply chain. Initially launched on May 1, 2025, with a budget of ₹22,919 crore and intended investment commitments of ₹59,350 crore, the ECMS application window was extended until September 30, 2025, after receiving 249 applications that promised investment commitments totaling ₹1.15 lakh crore. So far, the initiative has seen the approval of 46 projects, leading to cumulative investments of ₹54,567 crore, expected to create over 51,000 jobs across 11 states, including key regions such as Gujarat, Tamil Nadu, and Uttar Pradesh. Industry experts emphasize that this increased allocation reflects a growing acknowledgment of India’s need to bolster its manufacturing capabilities beyond assembly. Neil Shah, vice president at Counterpoint Research, stated, "The enhanced funding for the Electronics Components Manufacturing Scheme will propel the Make In India initiative, expanding our manufacturing supply chain’s depth and breadth. This is crucial for evolving the electronics ecosystem to cover not just smartphones but also PCs, servers, robotics, and beyond." S Krishnan, Secretary of the Ministry of Electronics & IT, highlighted that the scheme targets both components that India can already produce and those that are higher in value, such as display and camera modules. The focus is on domestic production of components that currently make up a significant portion of India’s electronics imports, categorized into sub-assemblies, bare components, and capital equipment. Recent approvals include various components essential for mobile and IT hardware, such as optical transceivers and camera module sub-assemblies from leading manufacturers. Industry stakeholders believe that the increased funding will facilitate India's shift from being an assembly-centric hub to a fully integrated manufacturing powerhouse. Rahul Sharma, co-founder of Bhagwati Products Limited, noted that the enhanced ECMS budget reflects strong industry interest and early successes, further emphasizing the importance of high-value components in the manufacturing ecosystem. This funding increase is expected to foster greater participation, accelerate local ecosystem development, and reduce reliance on imports, thus solidifying India’s position in the global electronics market. While India’s electronics production has surged from ₹1.9 lakh crore in 2014-15 to ₹11.3 lakh crore in 2024-25, the local value addition remains relatively low, between 18% and 20% of total output. Prabhu Ram, vice president at CyberMedia Research, remarked that the expanded ECMS budget, in conjunction with the India Semiconductor Mission 2.0, signifies a comprehensive approach to enhancing the semiconductor and electronics landscape, aiming for greater integration into global supply chains and increased exports.