India’s Electronics Manufacturing Push Gets ₹40,000 Crore Boost in Union Budget 2026

India’s electronics manufacturing sector is entering a defining phase. The Union Budget 2026–27 has raised the outlay for the Electronics Components Manufacturing Scheme (ECMS) to ₹40,000 crore, underscoring the government’s intent to deepen domestic manufacturing capabilities and reduce reliance on imports.

Over the past decade, India has steadily transformed itself into a major electronics manufacturing hub. Production has expanded nearly sixfold, the industrial base has widened significantly, and the sector has generated close to 25 lakh jobs. Electronics manufacturing has now emerged as a key pillar of employment generation and economic growth.

This momentum is increasingly visible in India’s export performance and its deeper integration into global value chains. A series of targeted policy interventions and sustained government support have strengthened domestic manufacturing, boosted exports, and drawn large-scale global investments. The ECMS is designed to build on these gains by reinforcing the component ecosystem—long considered the missing link—and positioning India as a credible destination for advanced electronics manufacturing.

With a long-term objective of building a $500 billion electronics manufacturing ecosystem by 2030–31, India is aiming to meet domestic demand and to emerge as a global technology partner that designs, builds, and exports at scale.

Electronics emerges as a key export engine

According to the Economic Survey 2025–26, electronics has become India’s third-largest and fastest-growing export category in 2024–25, climbing from seventh place just three years earlier. In the first half of FY 2025–26 alone, electronics exports touched USD 22.2 billion, maintaining strong growth momentum and putting the sector on track to become the country’s second-largest export category.

Domestic production has expanded sharply, rising from ₹1.9 lakh crore in 2014–15 to ₹11.3 lakh crore in 2024–25. Exports during the same period increased from ₹38,000 crore to ₹3.27 lakh crore, reflecting an eight-fold jump. Over the past ten years, electronics manufacturing has generated around 25 lakh jobs across the country.

Mobile phones have been central to this transformation. Production in the segment surged from ₹18,000 crore in 2014–15 to ₹5.45 lakh crore in 2024–25, marking a 28-fold increase. India is now the world’s second-largest mobile phone manufacturer, with more than 300 manufacturing units in operation, compared to just two a decade ago.

Exports of mobile phones have grown even more dramatically—from ₹1,500 crore in 2014–15 to nearly ₹2 lakh crore in 2024–25, a 127-fold rise. In the first five months of FY 2025–26, smartphone exports reached ₹1 lakh crore, registering a 55% increase over the same period last year.

India has also achieved near self-reliance in mobile phone production, shifting from heavy import dependence to domestic manufacturing of almost all devices sold in the country. This transition highlights the effectiveness of India’s policy framework and its growing reputation as a trusted global manufacturing base.

ECMS: strengthening the component backbone

The Electronics Components Manufacturing Scheme was notified on April 8, 2025, with an initial outlay of ₹22,919 crore and a tenure of six years, along with an optional one-year gestation period. The scheme aims to create a resilient and self-sustaining ecosystem for electronics component manufacturing by attracting investments across the value chain and increasing domestic value addition. It complements the India Semiconductor Mission, working in tandem to strengthen the broader electronics and semiconductor landscape.

Industry response to the scheme has exceeded expectations. As of December 2025, projected investment commitments stand at ₹1,15,351 crore—nearly double the original target. Expected production over the next six years is estimated at ₹10,34,751 crore, more than twice the initial projection. Incentive outgo is projected at ₹41,468 crore, compared with the original estimate of ₹22,805 crore. Direct employment generation is expected to reach 1,41,801 jobs, well above the target of 91,600, in addition to substantial indirect employment.

Since its launch, ECMS has seen strong participation from industry across the country. A total of 46 applications have been approved across 11 states, representing cumulative investments of ₹54,567 crore and a projected production value of ₹3,67,343 crore. These projects are expected to create direct employment for around 51,000 people.

Together, these developments signal a structural shift in India’s electronics manufacturing journey—from assembly-led growth to a more integrated, component-driven ecosystem—strengthening the country’s position in global electronics supply chains.

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