Union Cabinet approves ₹22,919 cr scheme for promoting electronics component manufacturing-OxBig News Network

File picture of Union Minister for Information and Broadcasting and Railways Ashwini Vaishnaw
| Photo Credit: Shiv Kumar Pushpakar

The Union cabinet on Friday (March 28, 2025) approved a ₹22,919 crore Electronics Component Manufacturing Scheme for a period of six years, Union Minister of Electronics and Information Technology Ashwini Vaishnaw announced. The scheme is the next step in the government’s electronics manufacturing efforts, which have so far focused on setting up semiconductor fabrication units and IT hardware, along with finished goods like mobile phones. 

With funding for the component ecosystem, the scheme aims to boost the value added for electronics goods in India — while semiconductor packaging and mobile phone assembly plants have received hefty support from the Union and State governments, they are themselves made of far smaller parts that often have to be imported. 

“Passive component and sub-assembly manufacturing will increase domestic value addition,” Mr. Vaishnaw told media personnel. “Countries that have done electronics manufacturing for more than three decades have been able to reach a high of domestic value addition of 38-40%. We have within ten years already reached 20%. Now we must target doubling this [share] in the coming five years by having passive as well as active components.” 

Unlike past schemes, this one is not based on a production-linked incentive, where manufacturers will be rewarded for incremental manufacturing. Instead, they will receive incentives pegged to the factory’s turnover, as well as in employment creation. The target is to induce ₹59,350 crore in investments, production worth ₹4,56,500 crore, and the creation of 91,600 direct jobs in the coming years. 

Active components refer to semiconductors and other critical components. This scheme is targeted at sub-assemblies (such as controllers for displays and phone cameras), and for so-called “bare components,” which include circuit boards, hardware enclosures, and lithium ion batteries. 

The scheme also focuses on capital goods, mainly large machinery that is in and of itself used to manufacture other components. “Because the volume of finished goods has increased, that has created a demand for capital goods,” Mr. Vaishnaw said. “Today, clusters have developed in Coimbatore, Bengaluru, Pune, Rajkot and Vadodara, where people have [already] invested in manufacture of capital goods and supplying to manufacturers.”

The government has not yet announced what percentage of the outlay is going to which category of components and capital goods — that will become clearer when the scheme itself launches, which Mr. Vaishnaw said would be done in a matter of weeks. 

The scheme “will attract investments and boost job creation,” Prime Minister Narendra Modi said in a post on X, formerly Twitter. “It will encourage innovation as well.”