Cabinet approves electronic component manufacturing PLI scheme at outlay of Rs 22,919 crore

Cabinet approves electronics component PLI scheme at outlay of Rs 25,000 crore: CNBC-Awaaz

The Union Cabinet on March 28 approved a production-linked incentive scheme for passive or non-semiconductor electronics components with an outlay of Rs 22,919 crore, Union Electronics and IT Minister Ashwini Vaishnaw said.

It is the first scheme that focuses on promoting the manufacturing of passive electronic components.

The minister said that the scheme will create direct employment for 91,600 people and attract investment of around Rs 59,350 crore.

"Passive components are approved under the Electronics Component PLI scheme. It has a total package of Rs 22,919 crore. This will be over six years," Vaishnaw said.

The minister said that that segment will serve the requirements of several sectors, including telecom, consumer electronics, automobile, medical devices, power sector etc.

He said that the scheme is expected to lead to production of Rs 4.56 lakh crore.

"India has started developing capital goods, machine goods used to make electronic products. Major centres have come up in Pune, Coimbatore, Rajkot, Bangalore. Apple today has 64 suppliers in India," said Vaishnaw.

According to electronics component makers body Elcina, non-semiconductor components production in India was around $13 billion in 2022 which is projected to reach around $20.7 billion by 2026 and around $37 billion by 2030 if the business continues as usual thereby leading a deficit of $248 billion in the segment in the next six years. The deficit is met through imports.

Elcina had sought a $8.57 billion (about Rs 72,500 crore) support package to reduce the deficit by Rs 12.36 lakh crore in the next six years.

Electronic Industries Association of India (Elcina) estimates that the deficit in the segment can increase to $248 billion (about Rs 21 lakh crore) by 2030 in the absence of government support to local production. The country's oldest technology industry body projects that the government's support could help reduce the deficit in the passive component segment by $146 billion (Rs 12.36 lakh crore) to $102 billion (Rs 8.63 lakh crore).

Sources told Moneycontrol government consultations have signaled a willingness to allow joint ventures with Chinese firms that are part of the global supply chain and work with international brands. This has spurred Indian EMS companies to pursue high-level negotiations with Chinese players embedded in global value chains (GVCs).

Moneycontrol previously reported that the government is open to JVs between Indian and Chinese companies with appropriate checks and balances. The interministerial committee, chaired by the Home Ministry, will evaluate each proposal on a case-by-case basis.

With the Indian government easing its stance on China-linked partnerships, EMS firms are moving quickly to secure key deals that could shape the country’s electronics manufacturing landscape in the coming decade.

Dixon Technologies has formed a joint venture with China's HKC to produce display modules by July-September 2025. The company is also exploring similar partnerships for precision components, mechanicals, camera modules, and battery packs.

Dixon Tech told CNBC-TV18 during an interaction earlier on March 28 that the electronics component PLI scheme would be a key driver for growth, helping reduce imports and strengthen domestic supply chain. CFO Saurabh Gupta said the PLI scheme will help Dixon improve its margins, and will also help India achieve its export target.

Zetwerk, a $2 billion manufacturing firm, is also eyeing joint ventures and technology transfers with global component manufacturers, including Chinese players and exploring acquisitions to expand its electronics components business.

With inputs from PTI