Budget 2026: ECMS outlay hike to power higher local value in smartphones, says Dixon’s Sunil Vachani

sunil vachani, Dixon

• Budget hike for ECMS to boost electronics manufacturing and component ecosystem
• Dixon starts camera module production and plans display module trials soon
• ECMS approves Dixon subsidiaries to make camera and optical transceiver parts.

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The increased outlay for the ECMS scheme in the Budget will provide further momentum to the electronics manufacturing industry and ensure that a strong and vibrant component ecosystem is created in the coming years, Sunil Vachani, founder and executive chairman of Dixon Technologies told Moneycontrol.

Vachani said Dixon has already commenced production of camera modules at its Greater Noida plant and will begin trial production of display modules in the next few months. These initiatives, he noted, will significantly deepen domestic value addition in mobile phones — raising it to nearly 35 percent from the current level of about 15 percent.

Dixon Technologies (India)'s Subsidiaries, Kunshan Q Tech Microelectronics (India) and Dixon Electroconnect have been granted approval by the Ministry of Electronics and Information Technology (MeitY), Government of India under the Electronics Component Manufacturing Scheme (ECMS) on 2 January 2026, for manufacturing of Camera Module Sub-assembly and Optical Transceiver-SFP, respectively.

The comments come after the government increased the outlay for the ECMS in the Union Budget to Rs 40,000 crore, aiming to strengthen India’s component ecosystem and reduce import dependence.

“The increased outlay for the ECMS scheme announced in the Budget is a very welcome step. This follows the huge success achieved in the mobile phones PLI scheme, wherein significant incremental production was achieved in India, with exports rising to almost $35 billion and total domestic production reaching nearly $80 billion,” he said,

The ECMS scheme announced earlier by MeitY provided momentum to the success of the mobile phone PLI by promising to create a robust component ecosystem that would make Indian exports globally competitive. “The response to the ECMS scheme was highly encouraging, and the government received investment proposals far exceeding expectations,” he added.

The increased outlay for the ECMS scheme in the Budget will provide further momentum to the electronics manufacturing industry and ensure that a strong and vibrant component ecosystem is created in the coming years.

“We at Dixon have already commenced production of camera modules at our Greater Noida plant, and in the next few months we will begin trial production of display modules. This will raise value addition in mobile phones to nearly 35 percent from the current level of about 15 percent,” Vachani added.

With companies like Dixon moving into high-value components such as camera and display modules, industry leaders believe the enhanced ECMS allocation could accelerate India’s shift from assembly-led manufacturing to a more integrated and value-driven electronics production base.

Electronics manufacturing services (EMS) providers have welcomed the move, saying it reflects the government’s serious intent to establish a complete ecosystem for electronics components and increase local value addition.

Optiemus Infracom’s Executive Chairman Ashok Gupta told Moneycontrol that the government is taking all possible steps to build a robust local supply chain, which he described as the lifeline of the electronics industry and allied sectors. “It is now time for industry leaders to collaborate and make this a great success,” he said.

Syrma SGS Managing Director J S Gujral also welcomed the decision, stating that it underscores the government’s intent to position India as a hub for electronics component manufacturing and integrate it with global supply chains. He added that the move will enable companies to further diversify component manufacturing and strengthen domestic capabilities.

Rahul Sharma, co-founder Bhagwati Products Limited, a Micromax sister company, said the reflects the strong industry response and early success of the scheme, driven by a surge in applications and growing confidence in India’s electronics manufacturing capabilities.

"Under the expanded allocation, focus is expected to remain on high-value components such as PCBs, camera modules, displays etc. The increased funding will enable wider participation, accelerate ecosystem development, deepen localisation and reduce import dependence, strengthening India’s role in the global electronics value chain," Sharma said.