With the Union Cabinet’s approval of a Production Linked Incentive (PLI) plan of Rs. 22,919 crore for electronic components and subassemblies, India is making significant strides in the production of electronics. It is anticipated that this action will strengthen the “Make in India” campaign, lessen reliance on imports, and establish India as a major center for electronics manufacturing worldwide.
Credits: ET Telecom
The decision has been welcomed by industry leaders and associations, including the EPIC Foundation, the Federation of All India IT Associations (FAIITA), and the India Electronics and Semiconductor Association (IESA), which highlight its potential to boost the supply chain, draw in investments, and create jobs. In this article, we will explore the impact of the Rs. 22,000 crore PLI scheme on India’s electronics manufacturing sector, its benefits, industry reactions, and the challenges ahead.
Addressing the Industry’s Long-Standing Demand
The electronics industry in India has grown quickly, but low-value addition has been a significant obstacle. Printed circuit boards (PCBs), passive components (capacitors, resistors, and inductors), and display modules—which make up 15–25% of the bill of materials for electronic products—were still imported by the nation despite efforts to increase manufacturing.
India hopes to increase domestic value addition and decrease reliance on imports by localizing component manufacture through this recently approved PLI initiative. Experts in the field think this will play a key role in realizing the government’s goal of establishing India as a major producer of electronics.
Industry Leaders Applaud the PLI Initiative
The announcement has generated optimism across the industry. Several key stakeholders have expressed their support for the scheme:
Ashok Chandak, President, IESA:
“This PLI scheme for electronic components and subassemblies is a long-standing industry demand. It is a clear indication of the government’s commitment to the Electronics System Design and Manufacturing (ESDM) sector. India’s electronics market is projected to reach USD 400 billion by 2030, and this initiative will accelerate the Make in India movement, drive higher value addition, and strengthen the domestic supply chain.”
Dr. Ajai Chowdhry, Founder, HCL & Chairman, EPIC Foundation:
“The long-awaited Electronics Components Manufacturing scheme will attract more investments and enable just-in-time manufacturing. This move will help startups design and manufacture products locally, positioning India as an Electronics Product Nation. Additionally, the employment-linked incentives in the scheme will boost workforce development.”
Devesh Rastogi, President, FAIITA:
“The Rs. 22,000 crore PLI for components will be a game-changer. Achieving 50% Make in India was previously a challenge due to the unavailability of locally made components. Now, this incentive will provide the much-needed push. While the fund allocation may be lower than required, it sets the stage for growth. The government must ensure that MSMEs benefit from this scheme to create a strong ancillary network supporting large companies.”
The Economic and Industrial Impact
The new PLI scheme is expected to have multiple economic benefits:
Increased Investments: Major global and domestic manufacturers will be encouraged to invest in India, boosting local production capacity.
Employment Generation: The employment-linked incentives will create job opportunities, driving workforce competitiveness and economic growth.
Strengthened Supply Chain: Reduced reliance on imported components will build a robust local supply chain, enhancing India’s self-sufficiency.
Boost to Semiconductor Ecosystem: This initiative complements India’s semiconductor manufacturing ramp-up, further strengthening the country’s position in the global electronics market.
Challenges and Future Prospects
While the scheme is a step in the right direction, some industry experts believe additional measures are required:
Infrastructure Development: Expanding industrial zones, improving logistics, and ensuring a steady power supply will be crucial for manufacturers.
Skilled Workforce: Upskilling workers to handle advanced electronics manufacturing will be necessary to maintain global competitiveness.
Design in India Initiative: Industry stakeholders eagerly await further government support for chip and system design, which would complete the full electronics ecosystem.
Despite these challenges, the PLI scheme lays a solid foundation for India’s electronics sector. If implemented effectively, it can propel the country into the global top league of electronics manufacturing.
Credits: ET Manufacturing
Conclusion: A Bold Step Towards Self-Reliance
The Rs. 22,000 crore PLI scheme’s approval represents a critical turning point in India’s progress toward electronics manufacturing independence. The government has given a strong push for domestic manufacturing, investment, and job development by addressing the industry’s main demands and providing incentives.
