The electronics manufacturing industry is asking the government for a production-linked incentive (PLI) scheme worth ₹30,000-₹35,000 crore. This is to support the growing exports of mobile phones and other electronics. The India Cellular & Electronics Association (ICEA), representing top smartphone brands and manufacturers, said the scheme is essential to meet the rising demand for electronics components, expected to reach $75-$80 billion by 2026 and $300 billion by 2032. These components are needed to support the manufacturing of $300 billion worth of electronics by 2026 and $1.2 trillion by 2032.
The goal of the scheme is to increase domestic value addition in mobile phone manufacturing to 35-40%, up from the current 18%, according to ICEA. Component manufacturing should progress alongside the development of India’s semiconductor ecosystem. To reduce reliance on imports, the industry needs to focus on local printed circuit board assembly (PCBA), circuit design, and deeper value addition in product manufacturing.
The component manufacturing ecosystem is expected to take 2-3 years to start commercial production. Once established, it should be able to meet 5-10% of global demand within 6-7 years. ICEA suggests inviting international companies to capture a significant share of the domestic and global component manufacturing market.
In its request to the Ministry of Electronics and Information Technology, the industry has asked for a PLI scheme with a 4-6% incentive for manufacturing sub-assemblies like camera modules, display assemblies, and high-end printed circuit boards, as well as passive components. ICEA Chairman Pankaj Mohindroo highlighted that the industry, with the government’s strong support, is committed to creating an effective stimulus for component manufacturing. The industry suggests an eight-year PLI plan, with companies able to claim incentives over six years within this period.
ICEA recommends that companies investing ₹1,000 crore or more in making surface-mount passive components, lithium-ion cells, and high-end PCBs should get 40% of their capital expenditure (capex) supported. They also suggest an average incentive of 5% for six years to support the production of raw materials and inputs for these components.
Additionally, supply chain units supporting component manufacturing should get 25% capex support. Critical sub-assemblies and components like connectors, camera modules, and display assemblies should receive a 4-6% incentive based on incremental sales. The industry also seeks a 5% interest subsidy on term loans and working capital to offset the high cost of finance in India.
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