The proposed Production-Linked Incentive (PLI) scheme for electronic components could address critical gaps in the domestic manufacturing ecosystem and reduce reliance on imports.
Electronics component manufacturers in India are advocating for the introduction of a dedicated Production-Linked Incentive (PLI) scheme in the forthcoming Budget 2025. They believe such a measure is crucial for enhancing their growth and competitiveness, thereby reducing the sector’s historical dependence on government support.
In addition to potential PLI incentives, the government is reportedly preparing a plan to encourage electronics manufacturing in Tier II towns. This initiative aims to decentralise production, foster job creation in smaller cities, and strengthen regional economies. Details of this strategy are expected to be unveiled during an upcoming meeting between state chief secretaries and Prime Minister Narendra Modi.
The Indian government has previously implemented PLI schemes to bolster electronics manufacturing. Notably, the PLI Scheme for Large Scale Electronics Manufacturing, introduced in April 2020, offers incentives of 4 percent to 6 percent on incremental sales of goods manufactured in India. This initiative has successfully attracted significant investments and increased production in the electronics sector.
Despite these efforts, the domestic electronics industry remains heavily reliant on imported components, particularly from China. To address this, the government is reportedly considering a new PLI scheme specifically targeting electronic components, with an anticipated outlay of $4 to $5 billion. This proposed scheme aims to incentivize the local production of key components, such as printed circuit boards, to strengthen domestic supply chains and reduce import dependence.
Industry leaders express optimism about the potential of India’s electronics supply chain to achieve robust and sustainable growth, provided the government continues its support through strategic initiatives. They emphasize the importance of measures like the proposed Production-Linked Incentive (PLI) scheme for electronic components, which could address critical gaps in the domestic manufacturing ecosystem and reduce reliance on imports.
