How India is Building a Self-Reliant Electronics Ecosystem with PLI and Infra Push

PLI-led policy push strengthens India’s tech manufacturing base

India is steadily emerging as a dominant force in global electronics manufacturing, driven by visionary policy reforms, fiscal incentives, and strategic infrastructure upgrades. At the heart of this transformation are the Production Linked Incentive (PLI) schemes and the development of Electronic Manufacturing Clusters (EMCs). These initiatives are propelling India toward self-reliance, boosting exports, and attracting significant foreign investment.

Policy-Driven Momentum in Electronics Manufacturing

The Indian government has recognized the critical importance of building a resilient and technologically advanced electronics sector. By focusing on domestic value addition, import substitution, and ecosystem development, India is reducing its dependence on foreign suppliers, especially in critical electronic components.

Production Linked Incentive (PLI): Fueling Growth and Investment

PLI schemes are central to India’s strategy to enhance local manufacturing. By offering direct financial rewards for incremental production and investment, these schemes have incentivized both domestic and global companies to set up operations in India.

Mobile Phones and Electronic Components

Initiated in April 2020, the PLI scheme for large-scale electronics manufacturing targets mobile devices and key components. Companies receive 3–6% incentives on incremental sales over five years. This policy led to a surge in mobile phone production — from 5.8 crore units in 2014–15 to over 33 crore units by 2023–24 — making India a net exporter.

IT Hardware Manufacturing Boost

PLI Scheme 2.0, focused on IT hardware like laptops, tablets, servers, and all-in-one PCs, provides incentives of up to 5%. The goal is to encourage high-value addition and develop critical manufacturing capabilities within India, especially in semiconductors and hardware components.

Electronics Components Manufacturing Scheme (ECMS)

With a budget of ₹23,000 crore, ECMS targets passive components, sub-assemblies, and capital equipment. It offers flexible incentive options — turnover-linked, capex-linked, and hybrid models — suited for various electronics sectors such as automotive, telecom, and medical tech. The scheme aims to generate over ₹59,000 crore in investments and 91,600 direct jobs.

By late 2024, cumulative investments under all PLI schemes crossed ₹1.61 lakh crore, resulting in nearly ₹14 lakh crore in production and over 11.5 lakh new jobs.

Building the Backbone: Electronic Manufacturing Clusters (EMCs)

To support PLI’s success, the government is investing in modern, well-equipped industrial zones through the EMC scheme. These clusters provide essential infrastructure — reliable power, transportation links, logistics hubs, and access to a skilled workforce.

EMC Scheme Key Features:

• Supports greenfield and brownfield clusters
• Offers up to 50% of the project cost for new EMCs and up to 75% for upgrades (with a ₹50 crore cap per project)
• 19 greenfield EMCs and 3 Common Facility Centres approved
• Covers over 3,464 acres with ₹1,470 crore sanctioned in grants

States like Uttar Pradesh, Tamil Nadu, and Karnataka are leveraging EMCs to emerge as electronics manufacturing hotspots.

Infrastructure Push: Logistics and Connectivity

To enhance competitiveness, India is implementing mega infrastructure projects such as Bharatmala, Sagarmala, and PM Gati Shakti. These programs are streamlining transportation networks, modernizing ports, and integrating digital logistics systems to ensure faster, more cost-effective movement of goods.

Impact: India’s Electronics Sector on the Rise

Domestic Value Addition

By localizing component production through ECMS and related schemes, India is reducing import dependency — especially from nations like China and Taiwan. This boosts resilience against global supply chain disruptions.

Employment Generation

PLI and EMC initiatives are creating thousands of direct jobs while also supporting ancillary employment in logistics, packaging, R&D, and services.

Surge in Exports

India is targeting electronics production worth $300 billion by 2026, with $120–140 billion expected from exports. Already, mobile phone and IT hardware exports are rising steadily year-over-year.

Innovation and R&D Growth

Incentives under PLI and SPECS are encouraging semiconductor design, chip fabrication, and advanced R&D, helping India transition from assembly to innovation-led manufacturing.

Challenges and Areas for Improvement

• Raw Material Dependence: Continued reliance on imported high-tech materials and chips.
• Logistical Constraints: Need for improved cargo handling, warehousing, and last-mile connectivity.
• Workforce Skill Gap: Greater focus on vocational training and upskilling is needed.
• Regulatory Delays: Faster clearances and streamlined procedures will improve ease of doing business.

Conclusion: A Path to Electronics Independence

With a combination of robust financial incentives and dedicated infrastructure, India is crafting a self-reliant and globally competitive electronics ecosystem. If current momentum is maintained and supported by consistent reforms, India has the potential to become a top global hub for electronics design, manufacturing, and exports.

Author: S. Ravi (Sethurathnam Ravi) Promoter and Managing Partner, Ravi Rajan & Co. LLP Former Chairman, Bombay Stock Exchange