Why in the News ?
- Recently, the Ministry of Electronics and Information Technology (MeitY) approved the third tranche of projects under the Electronics Component Manufacturing Scheme (ECMS).
- This phase involves 22 new projects with a combined investment commitment of ₹41,863 crore, aimed at creating over 33,000 direct jobs.
- The approvals include major industry players like Samsung Display, Tata Electronics, Foxconn, and Dixon Technologies.
- This move is a strategic step toward reducing India’s heavy reliance on imported components, particularly from East Asian markets, and moving the domestic industry from assembly-led growth to high-value-added manufacturing.
Overview of the Electronics Component Manufacturing Scheme (ECMS)
- Nature of the Scheme: The Electronics Component Manufacturing Scheme (ECMS) is the first dedicated production-linked incentive (PLI) scheme to promote the manufacturing of select passive electronic components in India.
- Target Components: The scheme targets components such as resistors, capacitors, relays, switches, connectors, speakers, microphones, and special ceramics.
- Nodal Ministry: Ministry of Electronics and Information Technology (MeitY).
- Primary Objective: To develop a robust component manufacturing ecosystem by attracting large-scale domestic and foreign investments and integrating Indian industries into Global Value Chains (GVCs).
- Implementation Agency: MeitY through a Project Management Agency (PMA).
Target Segments and Incentive Structure
The scheme categorizes electronic products into specific segments, offering differentiated incentives based on the nature of the manufacturing process and the “disability” (cost disadvantages) faced by the industry.
| Category | Target Segments | Incentive Type |
| Category A | Sub-assemblies (e.g., Display modules, Camera modules, Optical transceivers). | Turnover-linked (Based on incremental sales). |
| Category B | Bare Components (e.g., Multilayer PCBs, Li-ion cells for digital use, Enclosures, Connectors). | Turnover-linked (Based on incremental sales). |
| Category C | Selected Bare Components (e.g., SMD passive components, Flexible PCBs). | Hybrid Model (Combination of Turnover and Capex-linked). |
| Category D | Supply Chain & Capital Equipment (Capital goods used in electronics manufacturing). | Capex-linked (Based on eligible capital investment). |
- Note on Incentive Rates: Incentives for incremental investments and turnover range from 1% to 10% depending on the specific component and the year of production.
Key Features and Eligibility
- Tenure:Turnover-linked incentives are provided for 6 years, following a one-year gestation period.
- Capex-linked incentives generally span 5 years.
- Nature of Investment: The scheme is open to both Greenfield (new units) and Brownfield (expansion of existing units) investments.
- Focus Areas: It primarily focuses on Passive Components (resistors, capacitors, etc.), while Active Components (like semiconductors) are covered under the India Semiconductor Mission (ISM).
- Employment Requirement: Generating employment is mandatory for all applicants, including component manufacturers and capital equipment producers, ensuring that the scheme promotes manufacturing while creating skilled jobs.
Significance of ECMS: The scheme strengthens domestic electronics supply chains, reduces import dependence on critical components, attracts domestic and foreign investment, promotes high-value manufacturing, and generates skilled employment in the electronics sector.
Consider the following statements regarding the importance of Electronics Component Manufacturing Scheme (ECMS):
1. ECMS strengthens domestic electronics supply chains.
2. ECMS reduces import dependence on critical electronic components.
3. ECMS attracts both foreign and domestic investment in electronics manufacturing.
4. ECMS primarily focuses on semiconductor fabrication and active component production.
Which of the statements given above is/are correct?
(a) 1, 2 and 3 only
(b) 1 and 4 only
(c) 2 and 4 only
(d) All of the above
Answer: (a) 1, 2 and 3 only
Explanation:
Statement 1: Correct – ECMS strengthens India’s domestic electronics supply chains by promoting component manufacturing.
Statement 2: Correct – The scheme reduces import dependence on critical components such as PCBs, resistors, capacitors, and connectors.
Statement 3: Correct – ECMS is designed to attract both domestic and foreign investment, integrating Indian manufacturers into Global Value Chains (GVCs).
Statement 4: Incorrect – ECMS focuses on passive electronic components, while semiconductor and active component manufacturing falls under the India Semiconductor Mission (ISM).
