ECMS boost to drive 35% smartphone value addition, to fortify global supply chains, say electronics manufacturers

Electronics

• Govt raises ECMS outlay to Rs 40,000 crore to boost electronics manufacturing
• Industry leaders say expanded ECMS will reduce imports and enhance value addition.
• India's budget aims to become a global electronics and semiconductor hub.

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Electronics manufacturing services (EMS) companies, including Dixon Technologies, Amber Enterprises, Optiemus Infracom, Syrma SGS Technology and Bhagwati Products Limited, have welcomed the government’s decision to raise the outlay for the Electronics Components Manufacturing Scheme (ECMS) to Rs 40,000 crore in the Union Budget, calling it a decisive step toward strengthening India’s component ecosystem and cutting import dependence.

Industry leaders believe the expanded ECMS support could fast-track India’s shift from assembly-led growth to a more integrated, value-driven electronics manufacturing base.

Sunil Vachani, Founder and Executive Chairman of Dixon Technologies, told Moneycontrol the enhanced allocation would accelerate value addition in mobile manufacturing. Dixon has already commenced camera module production at its Greater Noida facility and will begin trial production of display modules in the coming months. These initiatives are expected to lift domestic value addition in mobile phones to nearly 35 percent from the current 15 percent.

Dixon subsidiaries Kunshan Q Tech Microelectronics (India) and Dixon Electroconnect have also secured approval from the Ministry of Electronics and IT (MeitY) under the ECMS for manufacturing camera module sub-assemblies and optical transceiver-SFP products.

Vachani said the ECMS builds on the success of the mobile PLI scheme, under which exports have surged to nearly $35 billion and domestic production has reached about $80 billion. The strong response to ECMS, with proposals exceeding expectations, underscores industry confidence, he added.

Launched in April 2025 with an initial outlay of Rs 22,919 crore, the Electronics Components Manufacturing Scheme (ECMS) has already attracted investment commitments nearly twice its original target, underscoring strong investor confidence in India’s electronics manufacturing ecosystem. Building on this momentum, the Finance Minister has proposed raising the scheme’s allocation to Rs 40,000 crore. The enhanced outlay is expected to boost domestic value addition, curb import dependence on critical components, and strengthen the integration of Indian manufacturers into global supply chains.

Optiemus Infracom Executive Chairman Ashok Gupta said the government is taking concrete steps to build a robust local supply chain, the “lifeline” of the electronics sector, and called for greater industry collaboration.

Syrma SGS Managing Director J S Gujral said the expanded outlay reinforces India’s ambition to emerge as a global hub for electronics components, enabling diversification and stronger integration with global supply chains.

Rahul Sharma, Co-founder of Bhagwati Products, said the increased allocation would deepen localisation in high-value components such as PCBs, camera modules and displays, broadening participation and accelerating ecosystem development.

Amber Enterprises Executive Chairman and CEO Jasbir Singh added that the focus on high-tech tool rooms and rejuvenation of legacy industrial clusters would further boost competitiveness and scale in the EMS sector.

The India Electronics and Semiconductor Association (IESA) on February 1 said the Union Budget’s emphasis on value addition, customs simplification, SEZ-to-DTA support, targeted backing for MSMEs and capital goods, ease of doing business, and reform-led manufacturing growth provides strong policy continuity and renewed confidence to the electronics industry.

IESA President Ashok Chandak said the expanded semiconductor focus beyond fabrication units—covering equipment, materials, chemicals, design tools, R&D, training, and supply-chain resilience—will help reduce import dependence, strengthen domestic capabilities, and build an end-to-end ecosystem for long-term sustainability.

He also highlighted the importance of technology adoption through industry-led research and training, job creation, and strategic initiatives such as the AI Mission, Quantum Mission, and RDI funding.

According to Chandak, the combined measures will consolidate recent gains, accelerate execution of approved projects, deepen domestic value addition, and strengthen India’s position as a globally competitive and trusted hub for electronics and semiconductor manufacturing. They will also lay the groundwork for meeting a significant share of domestic semiconductor demand through local design and production in the coming years.

IESA said the sectoral support outlined in the Budget reflects the sustained efforts of the Ministry of Electronics and IT (MeitY) in working closely with industry to translate policy vision into execution, and commended the ministry for enabling the growth of India’s semiconductor and electronics ecosystem.