Major Government Schemes for Electronics and Mobile Manufacturing in India

India’s strategic push to establish itself as a global hub for Electronics System Design and Manufacturing (ESDM) relies on targeted government interventions. Guided by the National Policy on Electronics (NPE) 2019, the Ministry of Electronics and Information Technology (MeitY) launched a trio of scheme packages designed to address domestic manufacturing disabilities, attract foreign direct investment (FDI), build world-class industrial infrastructure, and establish a complete end-to-end electronics value chain.

National Policy on Electronics 2019 (NPE 2019)

• Replaced the National Policy on Electronics 2012 to position India as a global ESDM leader.
• Set a target to achieve a turnover of $400 billion in the electronics manufacturing ecosystem by 2025-26.
• Envisaged the production of 1 billion mobile handsets worth 190 billion, including 600 million units valued at 110 billion meant for exports.
• Focuses on creating an ecosystem for chip design, sub-assemblies, electronic components, and assembly, testing, marking, and packaging (ATMP) units.

Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing

• Launched in April 2020 to provide performance-linked financial incentives on incremental sales of goods manufactured in India over a base year.
• Covers two primary target segments: Mobile Phones and Specified Electronic Components (e.g., SMT components, printed circuit boards, camera modules, display assemblies).
• Financial incentive rates were set at 4% to 6% on incremental sales of eligible goods for five years.
• Differentiates eligibility based on global revenue thresholds for international companies versus domestic champions.
• Generated substantial direct employment and propelled smartphones into India’s top exported commodities.

Production Linked Incentive (PLI 2.0) Scheme for IT Hardware

• Approved to cover laptops, tablets, All-in-One PCs, ultra-small form factor servers, and wearable computing devices.
• Offers an average incentive rate of approximately 5% over a 6-year operational tenure.
• Introduces additional flexibility by offering localized component sourcing incentives to deepen domestic value addition.
• Encourages global major brand owners to partner with domestic contract manufacturers.

Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)

• Notified to offer a financial incentive to offset the disability for domestic manufacturing of electronic components and semiconductors.
• Provides a capital expenditure (CapEx) subsidy of 25% on investments in plant, machinery, equipment, associated utilities, and R&D infrastructure.
• Covers active components, passive components, electromechanical items, multi-layer PCBs, display assemblies, and semiconductor packaging facilities.
• Applies to both new greenfield manufacturing units and the modernization or expansion of existing brownfield facilities.

Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme

• Introduced to build world-class physical infrastructure alongside common facilities and logistics access for electronics firms.
• Offers financial support for setting up Electronics Manufacturing Clusters (EMCs) and Common Facility Centres (CFCs).
• EMC Projects: Provides financial assistance up to 50% of the project cost, subject to a ceiling of ₹70 crore for every 100 acres of land.
• Common Facility Centres (CFCs): Provides financial assistance up to 75% of the project cost, capped at ₹75 crore per CFC, to establish testing labs, tool rooms, CAD/CAM design centers, and SMT assembly lines.
• Requires a minimum contiguous land area of 200 acres for anchor unit-led projects.

Scheme for Promotion of Semiconductor and Display Manufacturing Ecosystem (India Semiconductor Mission)

• Outlaid with a financial allocation of ₹76,000 crore to build an end-to-end semiconductor fabrication, display manufacturing, and design ecosystem.
• Modified Semiconductor Fab Scheme: Offers financial fiscal support of 50% of the total project cost on a pari-passu basis for setting up Silicon CMOS Fabs.
• Modified Display Fab Scheme: Provides 50% fiscal support for establishing TFT LCD or AMOLED display fabrication units.
• Modified Compound Semiconductors / ATMP / OSAT Scheme: Delivers 50% capital support for setting up compound semiconductor, silicon photonics, sensor fab, and semiconductor packaging plants.
• Design Linked Incentive (DLI) Scheme: Offers financial incentives and infrastructure support up to 50% of eligible expenditure for indigenous semiconductor design projects.

Comparative Architecture of Key Electronics Schemes

Key Facts and Data

• The National Policy on Electronics 2019 targeted an overall ESDM turnover of $400 billion.
• Electronics manufacturing in India reached over $100 billion in value, driven largely by mobile phone manufacturing growth.
• Domestic value addition in Indian electronics manufacturing improved to 18%–20%.
• SPECS provides a 25% direct capital subsidy for qualifying component and semiconductor packaging machinery investments.
• The India Semiconductor Mission functions as an autonomous business division within Digital India Corporation to implement semiconductor programs.
• The Modified EMC 2.0 scheme requires a minimum contiguous area of 200 acres for an Electronics Manufacturing Cluster project.
• The Design Linked Incentive (DLI) scheme supports Indian startups and MSMEs engaged in semiconductor design by offsetting development costs.
• India has emerged as the second-largest mobile phone manufacturer globally in terms of overall unit volume.