India's electronics success story has been largely assembly-led. Examine how the Electronics Component Manufacturing Scheme seeks to deepen domestic value addition, and the constraints it faces.

India's electronics production has grown rapidly. But domestic value addition is still only about 18–20% [4], because firms mostly assemble imported parts. The Electronics Component Manufacturing Scheme (ECMS), approved by the Cabinet in March 2025 [1], targets this gap further up the supply chain. Its design is sound, but success depends on execution and on becoming cost-competitive.

How ECMS seeks to deepen value addition

• Upstream focus: it supports bare components, sub-assemblies, supply-chain inputs and capital equipment [1]. Examples include a ₹3,546-crore copper foil plant at Amreli, Gujarat, and copper clad laminates for PCBs [2].
• Output-linked design: incentives are turnover-linked and paid only after production begins [2]. Its predecessor SPECS paid a 25% capex subsidy [5]. The new design lowers the risk of paying for idle plants.
• Strong industry response: 118 projects and ₹77,051 crore committed, about 30% above the ₹59,350-crore investment target [2]. The outlay was raised from ₹22,919 crore to ₹40,000 crore [3].
• Spread across States: projects are located in 15 States, with about 74,600 direct jobs projected [3]. This encourages States to build electronics clusters.
• GVC integration: the scheme fits NITI Aayog's goal of $150 billion of component output within a $500-billion electronics target by FY30 [6].

Constraints

• Approved is not the same as producing: by August 2026, only 38 of 106 approved plants had started production [3].
• Little money paid out so far: Budget 2026–27 gives ECMS only ₹1,500 crore of its ₹40,000-crore outlay [5]. The PLI record is a warning: MeitY's PLI funds went unspent as firms missed thresholds, and IT-hardware PLI 2.0 met only about 20% of its investment target [5].
• Cost disadvantage: high tariffs on component inputs make Indian components costlier [6]. Whether plants survive after the 6-year tenure ends is uncertain [1].
• Technology gap: high-end components need know-how from foreign firms. Press Note 3 (2020) slows partnerships with firms from land-border countries [6].
• Jobs shortfall: projected direct jobs are still below the launch target of 91,600 [1][3].

ECMS shifts industrial policy from assembly to inputs, and its output-linked design is fiscally prudent. The way forward is to publish production and payouts plant by plant, rationalise tariffs on inputs, and clear Press Note 3 cases within fixed timelines, as NITI Aayog recommends [6]. If ECMS is judged by rising value addition rather than the number of approvals, it can anchor a truly Atmanirbhar electronics ecosystem.