India’s electronics component industry is no longer limited only to import substitution; it is rapidly becoming part of exports and the global supply chain. Domestic manufacturers are fulfilling a large portion of the demand for several important components and are also shipping products to global markets, including China.
Meanwhile, the government has approved 31 new projects worth Rs 7,877 crore under the Electronics Component Manufacturing Scheme (ECMS). This step is expected to increase the manufacturing capacity of electronic components in the country, reduce dependence on imports, and give domestic companies a stronger place in the global supply chain.
Let us understand how India’s electronics component manufacturing sector is growing rapidly and what impact it could have on companies and investors.
What’s Happening?
The government has approved 31 new proposals under the Electronics Component Manufacturing Scheme (ECMS), involving an investment of Rs 7,877 crore. With this, the total number of projects approved across five tranches has reached 106, and the total investment has crossed the figure of Rs 69,000 crore. These approvals are expected to translate into production of Rs 82,243 crore.
Union Minister Ashwini Vaishnaw said that when the scheme was launched, the government had set a target of Rs 59,000 crore investment, but the scheme has already achieved an investment of Rs 69,000 crore. Private investment is now coming into very important sectors. ECMS is being described as one of the government’s fastest-progressing manufacturing programmes.
What is the ECMS Scheme?
ECMS was launched in April 2025 with the objective of attracting investment in components, sub-assemblies, camera modules, optical transceivers and capital goods required for electronics manufacturing. So far, 106 projects have been approved under the scheme, spread across 30 products and 15 states. Their total estimated production value is Rs 5,34,101 crore, while the current tranche covers 20 target segment products.
The focus of the scheme is not just on assembly, but on the domestic manufacturing of critical components and raw materials. Out of the 106 projects, 38 plants have already started manufacturing, while 16 projects are in the advanced stage of construction or machinery installation. Domestic manufacturing of critical components such as filters, coils, speakers, acetylene black and electrolyte additives is starting for the first time.
Domestic production has now not only met demand in several categories but has also surpassed it. Production is about 110% of demand in anode materials, 350% in optical transceiver-SFP, and 200% in relays. The capacity for enclosures is also meeting nearly 100% of domestic demand.
Which Companies have Received Approval?
In the new tranche of ECMS, Wipro Global Engineering has received approval of Rs 1,033 crore for copper-clad laminates, Jyoti CNC Automation Rs 1,021 crore for capital goods, and Skyquad Electronics & Appliances Rs 740 crore for camera modules. Micromax Precision Moulding has been given a project of Rs 565 crore and Quantum Magnetics Rs 400 crore for rare-earth permanent magnets.
In addition, PCBL Chemical, Minda Instruments, VVDN Technologies, Mitsubishi Electric India, Syrma SGS Technology and Centum Electronics have also received approvals for various components.
These projects are expected to create about 9,588 direct jobs. Combining all 106 projects, an estimated 74,628 direct and about 2.5 lakh indirect jobs will be generated. Meanwhile, some new facilities of Kaynes, Dixon, Motherson and Wipro are expected to become operational in the next 1-4 months.
What Does This Mean for Investors?
After the approval of 31 new projects under ECMS, shares of electronics manufacturing services (EMS) companies saw a rise of up to 2% on 18 August.
The important aspect for investors is that with the increase in domestic production of electronic components in India, companies such as Dixon Technologies, Kaynes, Motherson, Syrma SGS, Centum Electronics and Jyoti CNC could benefit. ECMS will increase their manufacturing capacity and reduce dependence on imports.
Its impact is already visible: 60% of the demand for lithium-ion cells, 80% for laminates and 75% for connectors is now being met by domestic production. That is, the share of local manufacturing in India’s electronics supply chain is continuously strengthening.
What’s Next?
The next challenge is to develop domestic manufacturing of materials and machinery. Union Minister Ashwini Vaishnaw said that there is a need to develop the domestic capacity for machinery that makes electronics components along with further localisation of materials. He urged industry associations to organise workshops and prepare a roadmap for domestic capital-equipment manufacturing.
Vaishnaw has set four priorities for the industry: design capabilities, indigenous supply chain, Six Sigma quality and lean manufacturing, and talent development. He said that without Six Sigma quality it is not possible to survive in electronics manufacturing, and according to ELCINA’s presentation, about 60% of companies are now moving towards Six Sigma quality standards. Domestic production has also started in segments dominated by China, such as rare-earth magnets, which can further strengthen the electronics supply chain in the long term.
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.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
