India’s new $2.7 billion PLI scheme aims to boost local electronics manufacturing by reducing import reliance, creating jobs, and driving innovation in core components like PCBs, displays, and semiconductors. A game-changer for India’s electronics industry and global ambitions.
SOURCE: Financial Express
A Big Push for Local Manufacturing
India has been making steady progress in electronics manufacturing, for years, particularly in assembling smartphones and consumer electronics. But here’s the challenge—while we’ve been great at putting things together, we still rely a lot on imported components. However, that’s about to change.
The Government of India, on March 28, 2025, announced a US$2.7 billion Production Linked Incentive (PLI) scheme for electronic components. To reduce imports and thereby boost local production, this scheme has a tenure of six years, with a one-year gestation period.
Over the next six years, the scheme should attract US$7 billion in investments, create 91,600 direct jobs and increase value addition in electronics manufacturing in the country.
But it’s important to understand that this isn’t just about incentives—it is a strategic shift that could push India up the global electronics value chain.
This initiative is the first dedicated PLI scheme for electronic components. It follows the 2020 PLI for large-scale electronics manufacturing, which drove mobile phone assembly. However, it kept India dependent on imports for key components.
Fixing the Weak Link: Core Component Manufacturing
Electronic components are the backbone of consumer electronics, telecom, automobiles, medical devices and defence equipment. But despite the fact that the country has gain prominence as a smartphone manufacturing hub, the domestic value addition in smartphones is just 17%-18% of the Bill of Materials (BOM).
Here’s why: 45% of a smartphone’s BOM is made up of semiconductor components, which require significant investment and time to manufacture locally. But the other 55%—which includes sub-assemblies like displays, camera modules, enclosures, PCBs and passive components—can be developed much faster. That is exactly what the scheme is aiming for.
The focus? Building local expertise in core components like multi-layer PCBs, resistors, capacitors, transformers, fuses, camera & display modules, enclosures and mechanical parts. By ramping up local production of these critical elements, India can reduce import dependence in tandem with cutting costs and creating a stronger supply chain for manufacturers.
How the PLI Scheme Works
The scheme is designed to work for a myriad of manufacturers. These include high-volume producers, capital-intensive factories, or a mix of both.
Incentives will be structured in three ways—turnover linked (based on revenue), capex intensive (for investments in plants & machinery), or hybrid (a combination of both).
A key element? Employment-linked incentives. The government has tied part of the payouts to job creation. Thus ensuring the scheme not only boosts manufacturing but also creates skilled jobs.
Who Stands to Benefit?
Mobile Phone & Consumer Electronics Players
Companies producing sub-assemblies like displays, camera modules and enclosures will benefit the most as the domestic value addition in smartphones is still under 20%, Among the winners are Dixon Technologies and Optiemus Infracom, to name a few—all of whom are expanding their local sourcing capabilities.
Component & PCB Makers
The scheme focuses on components and sub-assemblies, crucial for boosting value addition. Companies like Kaynes Technology, Sahasra Electronics (PCBs) are big beneficiaries.
Semiconductor & Passive Component Players
While India is still working on semiconductor fabs, several companies already produce chip packaging, resistors and capacitors. Key players include Polymatech Electronics (semiconductor packaging), Sterlite Technologies (optical fiber & telecom components).
