India's electronics manufacturing boom has been assembly-led. Examine how schemes like ECMS seek to raise domestic value addition.

India's electronics production has grown sixfold and its exports eightfold over 11 years [1]. Yet industry estimates put domestic value addition (DVA) at only 18–20% [2]. The boom rests on assembling imported chips, displays and modules. The Electronics Component Manufacturing Scheme (ECMS) is meant to fill this missing middle of the value chain.

Why the boom has been assembly-led

• Incentive design: The PLI for large-scale electronics pays 4–6% on incremental sales of finished goods [3]. This rewarded assembly volume, not depth.
• Import dependence: Integrated circuits alone make up 23.7% of the import basket. Batteries and displays are also largely imported [4].
• Tariff structure: India's tariffs protect final assembly but raise costs for component-heavy production [4].
• Capability gap: Making components needs precision fabrication, R&D and skilled workers, and all three take years to build.

How ECMS seeks to raise DVA

• Moving up the chain: ECMS targets sub-assemblies, bare components and capital goods [5].
• Incentives tied to output and investment: It offers turnover-linked support for items like multi-layer PCBs [5]. It does not use tariff walls or local-content mandates, which can be challenged under WTO rules [9].
• Scale of commitment: The outlay was raised from ₹22,919 crore to ₹40,000 crore (Budget 2026–27). By August 2026, 106 projects in 15 States had been approved, with 38 plants in production [6].
• Filling ecosystem gaps: It approved India's first copper clad laminate plant, the base material for PCBs [7]. It also approved the first flexible PCB, tantalum capacitor and rare-earth permanent magnet units [8]. These plants also make supply chains more secure.
• Competition among States: States compete to host these plants, which spreads the component base beyond a few clusters [6].

Limits

• Plants can be approved faster than a whole supplier base, skilled workforce and R&D system can grow around them [4].
• Total value matters more than the ratio: Aggregate value added and export volume may count for more than the DVA percentage. China took about two decades to reach roughly 50% DVA [9].

ECMS moves policy from rewarding assembly volume to building component depth, and it does so in a WTO-compatible way. It will work best if linked with the India Semiconductor Mission, skilling and R&D, and if MeitY judges it by total value and exports added, not by the DVA ratio alone [9]. That would turn Atmanirbhar Bharat into real value-chain depth and advance SDG 9.