Evaluate how far the PLI and ECMS schemes have moved India from assembly toward deeper value addition in electronics. What constraints remain?

India has gained from the China+1 shift and is now a major phone-making hub. Yet NITI Aayog estimates that domestic value addition (DVA) in electronics is only about 15–18% [4]. PLI has clearly expanded assembly. ECMS has only begun the harder move into components.

Progress achieved

• Scale of investment: PLI–LSEM (2020) pays 4–6% on incremental sales over the base year FY 2019-20 [1]. Investment of over ₹20,000 crore far exceeded its ₹7,000 crore target [6].
• Export shift: Smartphones became India's top exported commodity in FY 2025-26 [6].
• Turn to components: ECMS was notified in April 2025 with an outlay of ₹22,919 crore. It targets PCBs, camera modules and sub-assemblies, and its first projects were approved in October 2025 [2]. Budget 2026-27 raised its outlay to ₹40,000 crore [3].

Limits of the shift

• Volume, not depth: PLI rewards sales. Firms earn the incentive even when most inputs are imported [1].
• Import dependence: NITI Aayog's Trade Watch reports continued reliance on imported semiconductors, displays and battery systems [5].
• Projects still on paper: ECMS approvals are commitments, not running factories [2]. Gains in DVA will therefore take years to show.
• Verdict: India has moved decisively in assembly but only modestly in value addition.

Constraints that remain

• Shallow supplier base: The World Bank found that Vietnam's FDI-led assembly had weak links to local suppliers, which limited its gains [7]. India's hubs similarly depend on a few anchor firms such as Foxconn and Tata.
• Technology and capital gap: High-value items like chips and displays need large capital and advanced know-how, which India's component base still lacks [5].
• Uneven State ecosystems: Land, power, approvals and skilled labour differ widely across States. As a result, investment clusters in a few States, such as Tamil Nadu.
• Incentive design: No incentive is tied to local sourcing, so firms have little reason to buy parts made in India [1].

PLI built the assembly base and ECMS has opened the component front, but value addition is still shallow. NITI Aayog recommends moving from assembly-led to component-led growth, with DVA rising above 35% [4]. Three steps would support this: link future incentives to DVA milestones, track ECMS projects until they start production, and build supplier parks around anchor firms. Together these can turn "Assembled in India" into a true Atmanirbhar "Made in India".