Domestic Manufacturing Push Gains Momentum with Rs 22,919 Crore Component Scheme
India’s electronics manufacturing industry is preparing for a major investment surge as top domestic players such as Dixon, Optiemus, Zetwerk, and Bhagwati enter talks with global component makers to establish joint ventures and strategic partnerships. With an investment plan ranging between Rs 800-Rs 1,000 crore per company, these firms aim to scale up local production of critical components, including camera modules, display modules, and mechanical components.
This renewed push follows the approval of the Rs 22,919 crore Component Manufacturing Scheme, a government initiative designed to reduce import dependence, attract foreign investment, and integrate India into global electronics supply chains. Industry leaders believe the policy will be a game-changer, offering incentives that will increase domestic value addition (DVA) and enhance India’s global competitiveness.
The Rs 22,919 crore Component Manufacturing Scheme is set to accelerate investments in India’s electronics manufacturing ecosystem, reducing reliance on imported components.
Major Investments Underway in Camera and Display Modules
Dixon Technologies, a leading contract manufacturer, has already commenced production under the new scheme. The company’s display module unit, in partnership with China’s HKC, is set to begin operations by the third quarter of the next fiscal year. Additionally, Dixon is negotiating a joint venture with a global partner for camera module production, reinforcing its strategy to localize high-value components.
Dixon Technologies plans to invest Rs 1,000 crore in FY26 to set up factories for camera and display module manufacturing.
Bhagwati Products Limited, the manufacturing arm of Micromax Informatics, is in advanced talks with global suppliers to co-develop camera and display modules.
Optiemus Electronics is collaborating with leading global suppliers to produce display and mechanical components, reducing dependency on imported parts.
Leading Indian manufacturers are investing heavily in camera and display modules, forging partnerships to drive local production and reduce import reliance.
Industry Leaders Push for Stronger Domestic Component Ecosystem
Industry executives believe that while India has scaled up finished product manufacturing, component manufacturing remains a critical gap. Sunil Vachani, Chairman of Dixon Technologies, emphasized the need to develop a robust component ecosystem, stating:
“We need to create a strong component ecosystem because finished product manufacturing has already achieved a certain scale. To make India the next hub for exports, we need a component ecosystem and enhanced value addition.”
Other industry voices echoed similar sentiments, calling for greater self-reliance in component production. Rahul Sharma, Co-Founder of Bhagwati Products, stated that integrating global value chains into India will be a crucial milestone in establishing the country as a global electronics powerhouse.
Industry leaders stress the importance of developing India’s domestic component ecosystem to support export growth and self-sufficiency.
Timeline for Implementation and Expected Industry Impact
Industry executives estimate that full-scale implementation of the policy will take 12-24 months, with component assembly expected to begin within months, while qualification processes for core technologies may take four months or more.
Component assembly can start quickly, while core component technologies require lengthy qualification cycles.
Zetwerk, a major player, has earmarked Rs 1,000 crore for component manufacturing and is actively pursuing global partnerships.
The industry is targeting $500 billion in electronics production by 2030, requiring higher domestic value addition.
According to Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), the new scheme will strengthen India’s role in global supply chains, creating large-scale employment and accelerating the Make in India initiative.
The Component Scheme is expected to fully integrate India into global electronics value chains over the next 12-24 months, creating employment and driving exports.
India’s Growing Electronics Market and Key Challenges
Since FY15, India’s domestic electronics production has surged 400%, reaching an estimated $135-140 billion. However, despite this progress, low-value addition remains a major hurdle. India continues to import key components, including:
Printed Circuit Boards (PCBs)
Passive components (capacitors, inductors, resistors)
Semiconductors
Display modules
These components account for 15-20% of the Bill of Materials (BoM) for electronic products, leading to a high import bill. Addressing this challenge, the Component Manufacturing Scheme is expected to boost domestic value addition and enhance India’s global competitiveness.
Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA), emphasized:
“The scheme will accelerate the Make in India initiative, strengthening the domestic supply chain, reducing imports, and enhancing India’s competitiveness.”
Despite significant growth, India’s reliance on imported components remains a key challenge, which the Component Manufacturing Scheme aims to address through local production incentives.
Government Backing: Rs 22,919 Crore Incentive Plan for Electronics Components
On Friday, the Union Cabinet approved a $2.7 billion (Rs 22,919 crore) initiative to boost domestic electronics component manufacturing. The program seeks to:
Encourage domestic and foreign companies to establish manufacturing units.
Offer subsidies up to 50% of project costs to incentivize investments.
Attract $7 billion (Rs 59,350 crore) in investments to manufacture $53.5 billion worth of electronics components.
Key focus areas under the scheme include:
Sub-assembly of display and camera modules
Printed Circuit Boards (PCBs)
Lithium-ion battery cells
Enclosures for mobile and electronics hardware
How the Incentives Will Work:
Applicants will have turnover targets, which will determine incentive allocation.
The scheme will localize production of components and capital goods used in manufacturing.
The government will provide capital expenditure-based incentives, though at a lower rate than 50% of the company’s expenditure.
The Rs 22,919 crore incentive program will attract domestic and global players, offering subsidies and capital support to scale up local component manufacturing.
India’s Path to Becoming a Global Electronics Manufacturing Hub
With the Indian government aggressively pushing for self-reliance in electronics manufacturing, industry players are aligning their strategies to leverage these incentives. If successfully implemented, the Component Manufacturing Scheme could:
Boost India’s role in global supply chains
Reduce dependency on imports
Create large-scale employment
With targeted investments, global collaborations, and government backing, India is poised to accelerate its transformation into a global electronics manufacturing powerhouse.
