How India Plans to Deepen Local Value Addition in Electronics Manufacturing
Introduction:
India’s aspiration to become a global hub for electronics manufacturing has taken a strategic turn with a renewed focus on deepening local value addition. After successful initiatives that localized smartphone assembly and improved electronics exports, the Indian government is now shifting its focus to developing a robust component ecosystem. This move is vital not only for self-reliance but also to reduce dependency on nations like China and enhance India’s position in the global value chain.
Why in News?
The Indian Government, in April 2025, notified a new ₹22,919 crore incentive scheme for electronics components. The scheme is aimed at pushing India’s manufacturing capabilities beyond mere assembly to producing crucial components such as semiconductors, resistors, capacitors, and more, thereby enhancing domestic value addition.
Point-wise Summary of the Article:
- Background and Shift in Focus:
- India has emerged as a preferred destination for global electronics giants like Apple and Samsung due to its:
- Large talent pool
- Government subsidies
- Strategic geopolitical location
- Earlier success: India localized smartphone assembly and began exporting certain models.
- Current shift: Focus has moved from assembly to value addition in components manufacturing.
- The ₹22,919 Crore Scheme:
- Announced by the IT Ministry in April 2025.
- Aims to incentivize the production of core electronics components.
- This is an extension of earlier Production Linked Incentive (PLI) schemes that mainly supported assembly operations.
- Role of the Semiconductor Mission:
- The India Semiconductor Mission will:
- Provide ₹76,000 crore for fabrication and packaging.
- Allocate ₹23,000 crore under the new scheme for component manufacturing.
- The Objective – Key Target:
- Increase domestic value addition from the current average of 15-20% to 35-40% in the next three years.
- Reduce reliance on Chinese imports which dominate global supply chains.
- Employment and Economic Impact:
- The new scheme is expected to:
- Generate production worth ₹4.56 lakh crore.
- Create 91,600 direct jobs.
- Attract investments worth ₹59,350 crore.
- Import Reduction:
- Import of critical components is expected to decrease significantly.
- Sectors like mobile phones, laptops, automotive electronics, and household appliances will benefit.
- Focus on Specific Components:
- Targeted components include:
- PCB assemblies
- Semiconductors
- Camera modules
- LED chipsets
- Resistors, capacitors, connectors, etc.
- Industrial Participation and Subsidy Mechanism:
- Entities can claim subsidies based on:
- Job creation
- Investment amount
- Production value
- Performance-linked subsidy ensures genuine participation.
- PLI Scheme Performance (Smartphones):
- ₹10,905 crore invested so far.
- ₹7.15 lakh crore production generated.
- ₹3.90 lakh crore in exports.
- Created 1.39 lakh jobs.
- PLI Scheme Performance (Laptops and Computers):
- ₹10,365 crore worth of products manufactured.
- ₹522 crore in exports.
- 5,132 new jobs created.
- Outlook:
- The smartphone PLI scheme is among the most successful.
- Laptop and IT hardware schemes are catching up after a late start.
- Contracts with major companies like Tata Electronics, Pegatron, and Foxconn have boosted interest.
Explanatory Notes:
Key Terms and Concepts:
- Value Addition:
- The process of increasing the economic value of a product by modifying it, such as assembling or adding components.
- Production Linked Incentive (PLI) Scheme:
- A government initiative offering incentives to companies based on their incremental sales and production capacity.
- India Semiconductor Mission (ISM):
- A government initiative aimed at building a robust semiconductor ecosystem in India.
- Components Ecosystem:
- The industry involved in manufacturing parts and subassemblies that go into finished electronic goods.
- PCB (Printed Circuit Board):
- A board used in electronics to mount components like microchips and connectors.
- Import Dependence:
- A situation where a country relies heavily on imports for a particular commodity or product, weakening its self-sufficiency.
- Geopolitical Headwinds:
- International political or economic events that can hinder business or economic activities, such as trade tensions between India and China.
Relevance for CLAT 2026 Aspirants:
- This topic is significant from both the Current Affairs and Legal Reasoning perspective.
- Questions may be framed on:
- India’s economic policies for self-reliance.
- Understanding of schemes like PLI and ISM.
- Implications of global trade and localization on Indian law and policy.
- Aspirants must be able to critically analyze:
- Government interventions in the economy.
- Public-private partnerships in tech growth.
- India’s comparative advantage in the electronics sector.
CLAT Gurukul Notes for Aspirants:
This article and policy highlight the Indian government’s broader commitment to Atmanirbhar Bharat (self-reliant India), a key topic for competitive examinations.
At CLAT Gurukul, we cover such topics extensively in our daily current affairs, legal reasoning sessions, and essay/discussion classes. Whether you’re reading this for understanding economic policy, or to answer a comprehension or critical reasoning question, our curated content ensures that you stay one step ahead in the preparation journey.
Conclusion:
India’s plan to deepen its local electronics manufacturing capabilities is not just a policy move—it is a strategic leap toward technological and economic self-reliance. With global dynamics pushing companies to diversify supply chains, India is positioning itself as a strong alternative with a supportive policy regime. The ₹22,919 crore component scheme marks a significant step in reducing import dependency and boosting the domestic economy, especially at a time when digital infrastructure and electronic consumption are at an all-time high.
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