Budget 2026: Indian smartphone manufacturers react to ECMS, say impact depends on 'effective implementation'

The Indian government has made a pivotal move in its electronics strategy with the unveiling of Budget 2026–27. Finance Minister Nirmala Sitharaman announced an increase in the Electronics Components Manufacturing Scheme (ECMS) funding to Rs 40,000 crore, aiming to bolster the domestic supply chain and elevate the nation from a mere assembly hub to a high-value manufacturing leader. In her address, Sitharaman highlighted the success of the ECMS, which was introduced in April 2025 with an initial budget of Rs 22,919 crore. She noted that the scheme had already attracted investment commitments that exceeded the original targets. The proposed increase in funding is seen as an opportunity to capitalize on this momentum. Industry experts and manufacturers have reacted positively to the budget boost, viewing it as a crucial step toward the sector's development. Sanjeev Agarwal, Executive Director and Chief Manufacturing Officer at Lava International Limited, described the expansion as an "encouraging move to strengthen India’s electronics manufacturing ecosystem." However, he emphasized that the policy's success hinges on effective implementation and the establishment of necessary infrastructure. Madhav Sheth, CEO of Ai+ Smartphones and Founder of NxtQuantum Shift Technologies, stated that the budget sends a strong message that India is focused on depth in manufacturing rather than just scale. He underscored the importance of this strategy in mitigating investment risks in key components such as display assemblies and camera modules, asserting that the budget provides the foundation for a true 'Made in India' ethos. Additionally, the budget introduces Semiconductor Mission 2.0 (ISM 2.0), designed to enhance the Indian semiconductor landscape by focusing on equipment, materials, and homegrown Intellectual Property (IP). Anku Jain, Managing Director of MediaTek India, praised ISM 2.0 as a significant step toward establishing India as a global semiconductor hub, noting the government's commitment to fostering innovation and domestic manufacturing. Market analysts anticipate that these new initiatives will expand India's manufacturing capabilities into more advanced technologies. Tarun Pathak, Research Director at Counterpoint Research, remarked that the budget marks a new phase for the 'Make in India' initiative. He pointed out the necessity of localizing production of critical components to enhance value addition and enable India to venture beyond smartphones into high-growth sectors such as AI servers, robotics, and PCs. Pathak emphasized that developing a robust Tier-1 ecosystem for multi-layer PCBs and advanced sensors is essential for maximizing the potential of the increased Rs 40,000 crore funding.