Full Text
REGD. No. D. L.-33004/99
The Gazette of India
CG-DL-E-08042025-262341
EXTRAORDINARY
PART I-Section 1
PUBLISHED BY AUTHORITY
No. 118] NEW DELHI, TUESDAY, APRIL 8, 2025/CHAITRA 18, 1947
MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY
(IPHW Division)
NOTIFICATION
New Delhi, the 8th April, 2025
Subject: Electronics Component Manufacturing Scheme
1. BACKGROUND
1.1 F. No. W/49/2024-IPHW.—Electronics is one of the highest-traded and fastest-growing industries globally
due to ongoing digitization. As digitization continues to advance, the electronics industry is expected to play
a pivotal role in shaping the global economy and advancing a country's economic and technological
development. Since electronics permeates all the sector of the economy, it has cross-cutting economic and
strategic importance. Its economic importance extends beyond its direct contribution, as it is a foundational
industry that influences, supports, and enables progress in other sectors.
1.2 In CY 2022, global electronics production stood at USD 4.3 trillion. Out of this, finished electronics products
accounted for approximately USD 2.5 trillion, while electronics components contributed around USD 1.8
trillion. (Source: S&P Global)
1.3 Ministry of Electronics and Information Technology (MeitY) had notified Phased Manufacturing
Programme, National Policy on Electronics 2019, and Production Linked Incentives (PLI) to boost
electronics manufacturing in the country. As a result of these initiatives, the domestic production of
electronic goods increased five times from ₹ 1.90 lakh crore (USD 30 Billion) in FY2014-15 to ₹ 9.52 lakh
crore in FY2023-24 (USD 115 Bn) (industry figures) at a Compound Annual Growth Rate (CAGR) of more
than 17%.
1.4 Further, the PLI scheme for Large Scale Electronics Manufacturing (LSEM) has also catalysed growth of
electronics manufacturing led by mobile phones, resulting in exponential growth in electronics export from ₹
81,822 crore in FY 2020-21 to ₹ 2,41,157 crore in FY 2023-24 at the CAGR of more than 43%.
1.5 Due to the success of PLI scheme for LSEM, launched in April 2020, the import of finished electronics
goods has more or less remained stagnant. However, the imports of electronic components required to
manufacture finished electronics goods have increased corresponding to the growth in electronics production.
1.6 NITI in its report "Electronics: Powering India's Participation in Global Value Chain (GVC)" released in
July 2024 enumerates multiple challenges faced by component and sub-assembly manufacturers. These are:
(i) high upfront capex requirement, (ii) high investment to turnover ratio (iii) long gestation period (iv) lack
of scale; and (v) catching up with technological advancements.
1.7 Therefore, for Bharat to move up the value chain in electronics manufacturing, it is imperative to create an
enabling environment for domestic manufacturing of components and sub-assemblies. Components are the
heart of electronics products and constitute a significant part of the total value of the finished product.
Domestic component manufacture would not only lead to significant increase in the domestic value addition
but also result in savings in significant foreign exchange by reducing imports.
1.8 Hence, a policy initiative for developing and manufacturing ecosystem for focused sub-assemblies and bare
components of electronics is also necessary to address the factors affecting the competitiveness of component
manufacturing in Bharat.
1.9 NITI Aayog in its report has also made recommendations for a policy initiative in terms of fiscal
interventions for component manufacture and reforms to help Bharat to create more employment in
electronics manufacture.
1.10 Such policy interventions would enable domestic manufacturers to integrate with the supply chain partners of
GVCs. This would help in achieving the desired scale and competitiveness through value addition not only
meeting the domestic demand but exports as well. Further, this would also result in creation of significant
employment opportunities for the youth in manufacturing space.
1.11 Accordingly, this scheme has been formulated to overcome the disabilities and other challenges being faced
by the industry to achieve “Atmanirbharta in electronics supply chain ecosystem” by offering incentives for
component manufacture in Bharat.
2. ELECTRONICS COMPONENT MANUFACTURING SCHEME
The scheme provides differentiated fiscal incentives in terms of (a) turnover linked incentive (b) capex
incentive and (c) hybrid incentive [i.e. combination of both (a) and (b)] on target segment products,
depending on the specific challenges being faced by the industry.
3. OBJECTIVE
The objective of the proposed scheme is to develop robust component manufacturing ecosystem by attracting
investments (global/domestic) across the value chain, leading to increase in Domestic Value Addition (DVA)
and increase in the share of Bharat's exports in global electronic trade by integrating its domestic electronic
industry with the Global Value Chains (GVCs).
4. TARGET SEGMENT
The target segments covered under the scheme shall be as follows:
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| S.No. | Target segments | Target segments |
+=======+====================================================+===================================================================================+
| A | Sub-assemblies | |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 1 | Display module sub-assembly | |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 2 | Camera module sub-assembly | |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| B | Bare components | |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 3 | Non-Surface mount devices (non-SMD) passive | components for electronic applications (illustrative list at Annexure A(I)) |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 4 | Electro-mechanicals for electronic applications | (illustrative list at Annexure A(I)) |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 5 | Multi-layer Printed Circuit Board (PCB) | |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 6 | Li-ion Cells for digital applications (excluding | storage and mobility) |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 7 | Enclosures for Mobile, IT Hardware products and | related devices |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| C | Selected bare components | |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 8 | High-density interconnect (HDI)/ Modified semi- | additive process (MSAP)/ Flexible PCB |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 9 | SMD passive components | |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| D | Supply chain ecosystem and capital equipment for | electronics manufacturing |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 10 | Parts/components used in manufacturing of sub- | assembly (A) and bare components (B) & (C) (illustrative list at Annexure A(I)) |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
| 11 | Capital goods used in electronics manufacturing | including their sub-assemblies and components |
+-------+----------------------------------------------------+-----------------------------------------------------------------------------------+
5. TYPE AND QUANTUM OF INCENTIVE
The scheme provides incentive in the form of turnover linked incentive, capex incentive and hybrid
incentive, defined as under:
Turnover linked incentive shall mean incentive as a percentage of incremental turnover/sales over base year
as per rate of incentive given in Annexure A(II) for various target segments and products covered therein.
Capex incentive shall mean incentive on eligible capital expenditure for manufacturing of target segment
goods as per rate of incentive given in Annexure A(II) for various target segments and products covered
therein. An adequate mechanism would be put in place for assessment of actual capital expenditure by an
applicant for Capex incentive. Furthermore, disbursement shall only be made after the commencement of
commercial production.
Hybrid incentive shall mean combination of turnover linked incentive and capex incentive for
manufacturing of target segment goods as per rate of incentive given in Annexure A(II) for various target
segments and products covered therein.
The type of incentive offered to the target segments under the scheme are as under:
+-------+--------------------------+---------------------------------------------------+
| S. No. | Incentive category | Target segments |
+=======+==========================+===================================================+
| 1 | Turnover linked incentive | A. Sub-assemblies and |
| | | B. Bare components |
+-------+--------------------------+---------------------------------------------------+
| 2 | Hybrid incentive | C. Selected bare components |
+-------+--------------------------+---------------------------------------------------+
| 3 | Capex incentive | D. Supply chain ecosystem and capital equipment for |
| | | electronics manufacturing |
+-------+--------------------------+---------------------------------------------------+
6. BASIS OF INCENTIVES
6.1 The turnover linked incentive shall be given on net incremental sales (over the base year) of target segment
goods manufactured in Bharat. For disbursement of turnover linked incentive, the incremental sales and
cumulative incremental investment shall be mandatory criteria. Out of total turnover linked incentive rate as
mentioned in Annexure A(II), 1% shall be disbursed only on meeting cumulative incremental employment
threshold criteria as per Annexure A(III). In case, an applicant meets incremental sales threshold and
cumulative incremental investment threshold and is unable to meet cumulative incremental employment
threshold, the turnover linked incentive shall be given by deducting equivalent to 1% of the turnover from the
specified rate at Annexure A(II).
6.2 The capex incentive shall be given on eligible capital expenditure, as per rates given in Annexure A(II),
incurred for manufacturing of target segment products in Bharat. For disbursement of capex incentive,
meeting the investment threshold and commencement of commercial production shall be mandatory criteria.
Out of total capex incentive rate (25%), 5% of the capex shall be disbursed only on meeting cumulative
incremental employment threshold as per Annexure A(III). In case, an applicant is meeting the investment
threshold and commencement of commercial production and unable to meet cumulative incremental
employment threshold, the capex incentive shall be given by deducting 5% of the capex from the specified
rate at Annexure A(II).
6.3 Target segment specific criteria, if any, shall be dealt in the scheme guidelines.
7. TENURE OF THE SCHEME
7.1 The turnover linked incentive under the scheme shall be provided for a period of six (6) years. There shall
also be a provision for one (1) year of gestation period on optional basis.
7.2 For target segments (A) sub-assemblies, (B) bare components and (C) selected bare components, the scheme
shall be open for applications for a period of three (3) months initially from 1st May 2025, which may be
extended. It may also be reopened for applications anytime during its tenure based on the response from the
industry and budget availability.
7.3 For turnover linked incentive, the first year for the purpose of incremental sales would be counted from 1st
April 2025 to 31st March 2026. For those opting for gestation period, this would be taken as 1st April 2026 to
31st March 2027. Further, the cumulative incremental investment shall be counted from the date of scheme
notification.
7.4 For target segments (D) Supply chain of sub-assemblies & bare components and capital equipment for
electronics manufacturing, the scheme shall be open for applications initially for a period of two (2) years
from 1st May 2025. The applications received under the scheme shall be appraised on an ongoing basis and
implementation shall proceed as per the approvals accorded under the scheme. The fiscal support shall be
available for investment made within 5 years from the date of acknowledgement of the application.
8. ELIGIBILITY
8.1 Greenfield as well as brownfield investment for the target segment shall be eligible under the scheme.
8.2 An applicant shall submit separate applications for each Target Segment products.
8.3 An applicant making multiple applications for the same product covered under the target segment shall not
be eligible.
8.4 The qualification of applicants shall be decided on consolidated global Electronics System Design and
Manufacturing (ESDM) revenue or manufacturing revenue/technological and financial capability and shall be
detailed in the scheme guidelines.
9. BASE YEAR
Financial Year (FY) 2024-25 shall be treated as the base year for the computation of turnover linked
incentive under the scheme. The applicant may opt for a gestation period of one year and, in such cases, base
year would be FY 2025-26.
10. BUDGET OUTLAY
The budget outlay of the scheme is ₹ 22,919 crore including administrative expenses. The incentive outlay
for the target segments under the scheme shall be fungible among themselves based upon the fund
requirement and response received under the scheme.
11. BASIS OF COMPUTATION
11.1 To avail incentives under the scheme, the applicant must meet the threshold criteria as mentioned at
Annexure A(III).
11.2 Turnover linked incentive shall be computed based on the details furnished by the applicants to the
Ministry/ Project Management Agency (PMA) with respect to cumulative incremental investment, net
incremental sales of manufactured goods under the target segment and cumulative incremental employment
generated.
11.3 Capex incentive shall be computed based on the details furnished by the applicants to the Ministry/
Project Management Agency (PMA) with respect to capital expenditure incurred, commencement of
commercial production and cumulative incremental employment generated.
11.4 Any investment/ sale considered under any other Government of Bharat scheme for incentive shall not be
considered as eligible investment/ sale under this scheme.
11.5 The claims under the scheme for the incentive may be submitted on a quarterly basis, subject to meeting
the eligibility criteria.
12. APPROVAL AND DISBURSEMENT PROCESS
The approval and disbursement process shall be dealt in scheme guidelines.
13. GOVERNANCE MECHANISM
13.1 The scheme shall be implemented by Ministry through a nodal agency, which shall act as a Project
Management Agency (PMA). The PMA shall be responsible for receiving the applications, scrutinizing the
applications, issuance of acknowledgement letter, and submitting the appraisal reports for consideration.
13.2 MeitY shall constitute an inter-ministerial Governing Council (GC) chaired by Secretary, MeitY and have
representatives from NITI Aayog, Department of Expenditure, Department of Economic Affairs, Department
for Promotion of Industry and Internal Trade, Department of Telecommunication, Ministry of Heavy
Industries.
13.3 GC shall review the appraisal report submitted by PMA and make recommendations to competent authority
for consideration and approval.
14. SCHEME GUIDELINES
The Scheme Guidelines for implementation of the scheme shall be issued by the Ministry of Electronics and
Information Technology separately with the approval of the Hon'ble Minister of Electronics and Information
Technology.
15. AMENDMENT IN SCHEME AND GUIDELINES
The scheme and its guidelines may be reviewed and amended, with respect to products covered under target
segment(s), applicable incentive rates, tenure of the scheme, threshold of investment, sales & employment,
gestation period, or any other matter considered necessary for effective implementation of the Scheme, from
time-to-time on recommendation of GC and approval of the Hon'ble Minister of Electronics and Information
Technology.
SUSHIL PAL, Jt. Secy.
Annexure A(I)
List of products covered under certain target segments
+-------+----------------------------------------------------+------------------------------------------------------------------------------------------------------------------+
| S. No. | Target Segments | Products covered |
+=======+====================================================+==================================================================================================================+
| 1 | Non-SMD passive components | Resistors, Capacitors, Ferrites, Specialty Ceramics, Inductors, Coils (including inductive coil), etc. for |
| | | electronic applications |
+-------+----------------------------------------------------+------------------------------------------------------------------------------------------------------------------+
| 2 | Electro-mechanicals | Speakers & Microphones for ICT products, Relays, Switches, Connectors, Heat Sinks, Antenna, Vibrator |
| | | Motors, Oscillators, Filters, Actuators, Crystals, Sensors (non-semiconductor), Transducers, etc. for electronic |
| | | applications |
+-------+----------------------------------------------------+------------------------------------------------------------------------------------------------------------------+
| 3 | Supply Chain of sub-assemblies & bare | Laminate, Pre-Peg, Copper Foil, Separator, Cathode Material, Anode Material, Electrolyte, Polypropylene |
| | components | Film, Spray Wire, Lenses, Protective Film, Glass Cover, Back Light, Contrast Film, Polarizer Film, etc. for |
| | | electronic applications. |
| | | (This is an illustrative list and is not an exhaustive list of supply chain.) |
+-------+----------------------------------------------------+------------------------------------------------------------------------------------------------------------------+
Annexure A(II)
Target segments and incentive rates
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| S.No. | Target segments | Cumulative | Turnover linked | Capex |
| | | investment | incentive | incentive |
| | | (₹) | (%) | (%) |
+=======+====================================================+======================+==========================+=================+
| A | Sub-assemblies | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 1 | Display module sub-assembly | 250 crore | 4/4/3/2/2/1 | NA |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 2 | Camera module sub-assembly | 250 crore | 5/4/4/3/2/2 | NA |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| B | Bare components | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 3 | Non-SMD passive components | 50 crore | 8/7/7/6/5/4 | NA |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 4 | Electro-mechanicals | 50 crore | 8/7/7/6/5/4 | NA |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 5 | Multi-layer PCB# | 50 crore | ≤ 6 layers | NA |
| | | | 6/6/5/5/4/4 | |
| | | | | |
| | | | ≥ 8 layers | |
| | | | 10/8/7/6/5/5 | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 6 | Li-ion Cells for digital application | 500 crore | 6/6/5/5/4/4 | NA |
| | (excluding storage and mobility)# | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 7 | Enclosures for Mobile, IT Hardware | 500 crore | 7/6/5/4/4/3 | NA |
| | products and related devices | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| C | Selected bare components | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 8 | HDI/MSAP/Flexible PCB | 1000 crore | 8/7/7/6/5/4 | 25% |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 9 | SMD passive components | 250 crore | 5/5/4/4/3/3 | 25% |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| S.No. | Target segments | Minimum | Turnover linked | Capex |
| | | investment | incentive | incentive |
| | | (₹) | (%) | (%) |
+=======+====================================================+======================+==========================+=================+
| D | Supply chain ecosystem and Capital equipment | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 10 | Supply chain of sub-assemblies (A) & | 10 crore | NA | 25% |
| | bare components (B) & (C) | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
| 11 | Capital goods used in electronics | 10 crore | NA | 25% |
| | manufacturing including their sub- | | | |
| | assemblies and components | | | |
+-------+----------------------------------------------------+----------------------+--------------------------+-----------------+
#The applicant shall be eligible for an additional incentive of 1% and 2% on domestic sourcing/manufacturing of
laminate for multi-layer PCB manufacturing and of Cathode Active Material (CAM) for Li-ion cell manufacturing
respectively.
Annexure A(III)
Threshold criteria for target segments
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| Target segments | Year | Cumulative | Incremental sales | Cumulative |
| | | incremental | threshold | incremental |
| | | investment | (in ₹ Cr) | employment |
| | | threshold | | threshold |
| | | (in ₹ Cr) | | (in No.) |
+====================================================+========+=======================================+=============================+====================================+
| (1) - Display | Year 1 | 50 | 200 | 50 |
| module | Year 2 | 100 | 400 | 100 |
| | Year 3 | 150 | 600 | 150 |
| | Year 4 | 200 | 800 | 200 |
| | Year 5 | 250 | 1,000 | 250 |
| | Year 6 | - | 1,200 | 300 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (2) - Camera | Year 1 | 50 | 150 | 75 |
| module | Year 2 | 100 | 300 | 150 |
| | Year 3 | 150 | 450 | 225 |
| | Year 4 | 200 | 600 | 300 |
| | Year 5 | 250 | 750 | 375 |
| | Year 6 | - | 900 | 450 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (3 & 4)- Non- | Year 1 | 10 | 15 | 30 |
| SMD Passive & | Year 2 | 20 | 30 | 60 |
| Electro- | Year 3 | 30 | 45 | 90 |
| mechanical | Year 4 | 40 | 60 | 120 |
| | Year 5 | 50 | 75 | 150 |
| | Year 6 | - | 90 | 180 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (5) - Multilayer | Year 1 | 10 | 15 | 15 |
| PCB | Year 2 | 20 | 30 | 30 |
| | Year 3 | 30 | 45 | 45 |
| | Year 4 | 40 | 60 | 60 |
| | Year 5 | 50 | 75 | 75 |
| | Year 6 | - | 90 | 90 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (6) - Li-ion cells | Year 1 | 100 | 200 | 100 |
| for digital | Year 2 | 200 | 400 | 200 |
| applications | Year 3 | 300 | 600 | 300 |
| (except storage | Year 4 | 400 | 800 | 400 |
| and mobility) | Year 5 | 500 | 1,000 | 500 |
| | Year 6 | - | 1,200 | 600 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (7) - Enclosures | Year 1 | 100 | 200 | 120 |
| for Mobile, IT | Year 2 | 200 | 400 | 240 |
| Hardware | Year 3 | 300 | 600 | 360 |
| products and | Year 4 | 400 | 800 | 480 |
| related devices | Year 5 | 500 | 1,000 | 600 |
| | Year 6 | - | 1,200 | 720 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (8) - HDI/MSAP/ | Year 1 | 200 | 200 | 200 |
| Flexible PCB | Year 2 | 400 | 400 | 400 |
| | Year 3 | 600 | 600 | 600 |
| | Year 4 | 800 | 800 | 800 |
| | Year 5 | 1,000 | 1,000 | 1,000 |
| | Year 6 | - | 1,200 | 1,200 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (9) - SMD passive | Year 1 | 50 | 75 | 100 |
| components | Year 2 | 100 | 150 | 200 |
| | Year 3 | 150 | 225 | 300 |
| | Year 4 | 200 | 300 | 400 |
| | Year 5 | 250 | 375 | 500 |
| | Year 6 | - | 450 | 600 |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (10) - Supply | - | 10 | Commencement of commercial | 10* |
| chain of sub- | | | production | |
| assemblies & bare | | | | |
| components | | | | |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
| (11) - Capital | - | 10 | Commencement of commercial | 20* |
| goods used in | | | production | |
| electronics | | | | |
| manufacturing | | | | |
| including their | | | | |
| sub-assemblies | | | | |
| and components | | | | |
+----------------------------------------------------+--------+---------------------------------------+-----------------------------+------------------------------------+
*It is indicative employment per crore of investment, the actual cumulative incremental employment threshold shall
be corresponding to the cumulative incremental investment.
SUSHIL PAL, Jt. Secy.