India is entering a decisive phase in its economic journey, where growth is being shaped not just by assembly or scale, but by deeper value addition and design capabilities. Over the past few years, the country has built a strong foundation in electronics manufacturing, including the rapid expansion of mobile phone production.
Let us take a closer look at the recent steps taken by the Government of India to promote electronic component manufacturing and assess whether this theme can emerge as a significant investment opportunity for investors.
What’s Happening?
On March 30, 2026, the Government of India approved 29 new proposals under the Electronics Component Manufacturing Scheme (ECMS). These proposals involve a total investment of Rs 7,104 crore, which is approximately $751 million. The approvals are expected to generate projected production of Rs 84,515 crore and create 14,246 direct jobs.
This comes on top of 46 previously approved applications (Rs 54,567 crore), taking the total number of approvals under ECMS to 75. The cumulative investment has now reached Rs 61,671 crore, surpassing the initial target of Rs 59,350 crore. These projects span 16 product categories, including display modules, antennas, capacitors, connectors, heat sinks, Li-ion cells, relays, resistors, transducers, SMD passives, flexible PCBs, inductors, laminates, metallised films, and rare earth permanent magnets.
Notably, these include the country’s first SMD passive plant (for tantalum-based capacitors), the first flexible PCB plant, and the first rare earth permanent magnet facility, which will manufacture magnets from rare earth oxides.
Design in India: New Condition for Subsidy
Union Minister for IT and Electronics Ashwini Vaishnaw has made it clear that companies will not receive subsidies if they use India merely as a manufacturing base. As he stated, “Real value is captured only when there is design in India.”
Under ECMS, incentives are now linked to the development of design, quality, and engineering capabilities within the country. The minister outlined four key priorities: building strong in-house design capabilities, developing a robust domestic supply chain, implementing Six Sigma quality programmes, and creating a skilled workforce through 4–5 training centres (each expected to train at least 5,000 people).
This marks a shift from scale-driven growth to strategic value creation. The government is encouraging companies to build design capabilities independently or in collaboration with academic institutions, while also prioritising local manufacturers in capital equipment.
Major Projects and Role of Companies
The approvals include several significant projects. Dixon Display Technologies Private Limited (a subsidiary of Dixon Technologies) has received approval for display modules. The company’s Rs 1,100 crore display plant in Greater Noida is expected to begin trials from June, with a targeted annual capacity of 60 million mobile phone displays and 24 million IT hardware displays.
This is expected to increase local value addition in mobile phone manufacturing from 18% to nearly 40%. Other participating companies include VVDN Technologies, Molex (India), Amphenol FCI India, TDK India, Lohum Cleantech (for rare earth permanent magnets), Vishay Components India, among others.
There is also a strong focus on capital goods and supply chain components, which will help reduce import dependence and build a more resilient ecosystem.
What Does This Mean for Investors?
This development sends a strong signal for investors tracking the electronics sector. With approvals worth Rs 61,671 crore and the potential to generate over 65,000 direct jobs, the scheme is gaining momentum. Companies investing in design and engineering capabilities are likely to benefit from incentives, while those relying solely on assembly may risk losing out on subsidies.
This creates opportunities for investors interested in domestic supply chains, advanced components, and capital equipment players. Initiatives such as Dixon are expected to enhance value addition, potentially improving margins and global competitiveness over the long term. Investors should focus on companies that prioritise design capabilities and maintain a strong quality focus.
What’s Next?
The government aims to scale India’s electronics manufacturing industry from $125 billion to $500 billion by 2031. ECMS is a key pillar of this strategy, aimed at reducing import dependence and increasing domestic value addition.
Ashwini Vaishnaw has expressed confidence in swift industry execution. Given the current geopolitical landscape, building a resilient and diversified supply chain is critical. If companies invest in design, quality, and skill development, India has the potential to emerge as a global hub for electronics manufacturing.
For investors, this is a long-term structural theme. Those who recognise this shift early and invest with a long-term perspective in design-focused companies can participate in India’s evolving electronics story, provided investment decisions are backed by thorough research.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
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