Budget 2026 Announces ₹40,000 Crore Outlay for Electronics Component Manufacturing: Dixon, Kaynes and Others in Focus

The Union Budget presented on February 1, 2026 includes a dedicated ₹40,000 crore outlay aimed at expanding electronics component manufacturing in India, a move that has immediately influenced the performance of several EMS companies. 

Budget Outlay of ₹40,000 Crore for Electronics Component Manufacturing 

The finance ministry earmarked ₹40,000 crore to boost domestic production of electronic components, with a focus on scaling up assembly lines and encouraging investment in semiconductor ecosystems. The allocation is part of a broader strategy to reduce import dependence and strengthen the supply chain for consumer electronics. 

Impact on EMS Companies 

Shares of Dixon Technologies, Kaynes Technology, Syrma SGS and Amber Enterprises rose between 3% and 5% following the announcement. The market response reflects investor confidence that the funding will enhance capacity utilisation and create new order books for these manufacturers. 

Read More: Tata Electronics New Fab Plant to Provide Prototyping Hub for Indian Startups! 

Government Initiatives on Semiconductor Development 

Alongside the component outlay, the budget outlines measures to accelerate semiconductor fabrication, including incentives for setting up wafer plants and research collaborations with academic institutions. These steps aim to build a self‑reliant semiconductor ecosystem that supports the broader electronics manufacturing sector. 

Market Reaction and Trading Activity 

On the trading day of February 1, 2026, the NSE recorded higher volumes in the EMS segment, with the index tracking these stocks gaining close to 2%. The rally was led by the aforementioned companies, each posting gains that stayed within the 5% range. 

Conclusion 

The ₹40,000 crore budget allocation underscores the government's commitment to localising electronics component production. Immediate market movements show a positive response from EMS firms, while the semiconductor incentives signal a coordinated effort to develop a comprehensive electronics manufacturing ecosystem. 

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