India plans $5 billion incentive scheme to boost local electronics manufacturing

The move aims to strengthen the country’s electronics industry while reducing its reliance on imports from China, Reuters reported.

Over the past six years, India’s electronics production has more than doubled, reaching $115 billion in 2024, driven largely by smartphone manufacturing from global giants like Apple and Samsung.

India has now become the world’s fourth-largest smartphone producer.

However, the industry has faced criticism for its dependency on imported components, particularly from China.

Details of the incentive scheme

The new scheme will offer incentives to companies producing key components like printed circuit boards, one of the officials stated, noting that the initiative aims to enhance domestic value addition and develop local supply chains.

The plan, spearheaded by the electronics ministry, is in its final stages and includes a list of eligible components.

Officials expect the scheme to be launched in two to three months after final approval from the finance ministry.

The total incentive amount is expected to range between $4 billion and $5 billion, available to both global and domestic firms that meet the qualifying criteria.

Neither the electronics ministry nor the finance ministry has commented publicly on the scheme.

India’s ambitious goals for electronics manufacturing

The government has set an ambitious target to expand electronics manufacturing to $500 billion by 2030, including $150 billion worth of component production, according to Niti Aayog, India’s top policy think tank.

In the fiscal year 2024, India imported electronics, telecom equipment, and electrical products worth $89.8 billion, with more than half coming from China and Hong Kong, data from the Global Trade Research Initiative (GTRI) shows.

Pankaj Mohindroo, head of the Cellular and Electronics Association of India, told Reuters that it is a good step. India needs to become more reliant on component manufacturing to achieve its goal of being a global hub of electronics production.

“This scheme comes at a critical time for promoting component manufacturing, which is essential to achieve global-scale electronics production, ” he told Reuters.

By supporting local component manufacturing, the scheme is expected to position India as a stronger player in the global electronics supply chain while reducing its dependence on imports.