Make in India 2.0: PLI Incentives and Infra Growth Powering Electronics Surge
- William John
- May 26
- 3 min read
India is undergoing a technological transformation, and at the heart of this shift lies the rapid expansion of its electronics manufacturing sector. Through robust policy initiatives like the Production Linked Incentive (PLI) schemes and targeted infrastructure development, the government aims to position India as a global leader in electronics production. These efforts form the cornerstone of the Make in India 2.0 vision—a renewed push to boost domestic capabilities, enhance export competitiveness, and reduce reliance on imports.
Driving Change: The Government’s Renewed Electronics Mission
India’s journey from being a major importer of electronic goods to emerging as a high-volume producer has been powered by a proactive government stance. Key policy levers such as the PLI schemes and Electronics Manufacturing Clusters (EMCs) are specifically tailored to attract investments, foster innovation, and create employment.
PLI Schemes: The Catalyst Behind Manufacturing Momentum
The government’s PLI schemes offer direct incentives to firms that achieve incremental sales and local value addition. These schemes have been instrumental in boosting electronics manufacturing at scale.
Large-Scale Electronics Manufacturing (LSEM)
Introduced in 2020, this scheme supports mobile phone and component production. With 3% to 6% incentives on incremental sales over five years, it has led to a dramatic increase in mobile production—from 5.8 crore units in 2014-15 to more than 33 crore in 2023-24.
IT Hardware PLI 2.0
Focusing on laptops, servers, and tablets, this scheme promotes localized production of high-value devices and critical components like semiconductors. Incentives of up to 5% over six years are spurring advanced tech investments.
Electronics Components Manufacturing Scheme (ECMS)
With an outlay of ₹23,000 crore, ECMS targets production of sub-assemblies and passive components through flexible incentive models. It aims to attract ₹59,350 crore in investments and create over 91,000 direct jobs.
Collectively, PLI initiatives across sectors have generated over ₹1.61 lakh crore in investments and close to ₹14 lakh crore in output by late 2024, significantly contributing to job creation.
Building the Base: Electronic Manufacturing Clusters (EMCs)
To support large-scale manufacturing, the government is expanding infrastructure through EMCs. These clusters offer shared utilities such as power, logistics hubs, and testing centers.
EMC Key Features:
Grants covering up to 50% of greenfield and 75% of brownfield project costs (max ₹50 crore)
Approval of 19 greenfield EMCs and 3 common facility centers
3,464 acres of developed land with ₹1,470 crore sanctioned in grants
States like Uttar Pradesh, Karnataka, and Tamil Nadu are emerging as electronics hubs due to EMC-led development.
Strengthening Logistics for Seamless Production
Initiatives such as Bharatmala, Sagarmala, and PM Gati Shakti are modernizing India’s logistics network. By enhancing road, port, and rail connectivity and integrating digital systems, these projects reduce transit costs and improve supply chain reliability.
Strategic Outcomes: India’s Electronics Sector on the Rise
Boost in Domestic Manufacturing
Increased localization of critical components has reduced India’s dependence on imports from countries like China and Taiwan, especially for semiconductors and high-end materials.
Surge in Exports
India’s electronics production is projected to hit $300 billion by 2026, with exports contributing $120–140 billion. Mobile phone and IT hardware exports are witnessing steady year-on-year growth.
Employment Generation
PLI and EMC projects are driving job creation. ECMS alone targets over 91,600 direct jobs, with indirect employment across design, logistics, and support sectors expected to surge.
Advancements in R&D and Innovation
By encouraging domestic design and manufacturing of chips and hardware through schemes like SPECS, India is building a competitive innovation ecosystem.
Remaining Hurdles on the Path Ahead
While progress is notable, some challenges remain:
Material Dependence: Certain advanced inputs and chipsets are still imported.
Skill Development: Continuous upskilling is essential for high-tech manufacturing roles.
Infrastructure Bottlenecks: Further digitization and capacity upgrades are needed.
Regulatory Simplification: Speeding up approvals and easing compliance will enhance investment appeal.
Conclusion: A Vision Becoming Reality
Make in India 2.0, driven by PLI schemes and infrastructure expansion, is transforming India into a manufacturing powerhouse. The combined impact of financial incentives, policy direction, and ecosystem support is helping the country transition from a major importer to a leading electronics exporter.
If the momentum continues, supported by skill enhancement and logistics upgrades, India is well on its way to becoming a global hub for electronics innovation and production.
Author:
S. Ravi (Sethurathnam Ravi)
Promoter and Managing Partner, Ravi Rajan & Co. LLPFormer Chairman,
Bombay Stock Exchange
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