MSMEs Dominate Electronics Component Manufacturing Scheme with 80% Share in Applications

The Indian government’s Electronics Component Manufacturing Scheme (ECMS), with an outlay of ₹22,805 crore, has seen an overwhelming response since the application window opened on May 1. Within just 15 days, 70 applications were submitted, reflecting widespread interest across the industry.

MSMEs at the Forefront of Applications

Union Minister Ashwini Vaishnaw revealed that approximately 80% of these 70 applications were submitted by micro, small and medium enterprises (MSMEs). This points towards a strong push from the MSME sector to engage in domestic electronics manufacturing and bridge the supply-demand gap in the industry.

Big Players Also Show Interest

Although the minister did not disclose the names of applicants, previous reports have indicated that major players such as Tata Electronics, Dixon Technologies and Foxconn have expressed interest in the scheme. Their participation could bring scale and experience, while MSMEs may offer agility and innovation.

Read More: MSMEs Can Now Access Loans Up to ₹10 Crore with Digital Footprint Model. 

Objective: Bridging the Input Supply Deficit

The scheme is designed to reduce India’s reliance on imports for electronic components. According to the Electronic Industries Association of India (Elcina), the demand-supply gap in this segment could touch $248 billion by 2030, driven by the country's ambition to reach $500 billion in electronics production. Without such a scheme, this gap would likely be filled through imports.

Financial Allocation Across Key Segments

Of the total ₹22,805 crore, ₹21,093 crore is allocated to promote sub-assemblies such as camera modules, multi-layered printed circuit boards (PCBs), flexible PCBs and surface-mounted passive components. Another ₹1,712 crore is earmarked for parts used in sub-assemblies and capital goods essential for electronics manufacturing.

Category-Based Component Classification

The scheme has divided components and sub-assemblies into four categories:

• Category A: Includes key sub-assemblies like display modules and camera modules.
   
• Category B: Covers components such as non-surface mount devices, multi-layered PCBs, lithium-ion cells for digital use, and enclosures for mobile and IT hardware.
   
• Category C: Comprises flexible PCBs and surface-mount device (SMD) passive components.
   
• Category D: Encompasses parts and capital goods used in manufacturing items listed under Categories A, B and C.

Application Window Details

Applications for Categories A, B and C will be accepted for an initial three-month window starting from 1 May. However, the government has extended a longer two-year application period for components and capital goods under Category D.

Conclusion 

This enthusiastic response, particularly from MSMEs, signals a promising start for India’s efforts to build a self-reliant electronics manufacturing ecosystem and reduce import dependence.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.