The Centre is aware that component manufacturing faces multiple challenges, ranging from high upfront capex cost, high investment turnover ratio, gestation period and challenges on technological capabilities, said Sushil Pal, Joint Secretary, MeitY.
“We cannot handle the component manufacturing scheme with a single brush, as we did with the Electronic Manufacturing Sector (EMS). Each component, because of the various challenges faced, requires a specially designed PLI scheme,” he said at the 14th edition of Source India – Electronics Supply Chain 2025: Enhancing the Electronics Supply Chain and Catalysing Value Addition, organised by the Electronics Industries’ Association of India on Tuesday.
It is not a component PLI, but a scheme that is a mix of many other schemes. It will have an incentive scheme based on turnover, it will be a sum element of capex that may have a mix of both elements as well, he said.
India has relied heavily on import of capital equipment for manufacturing processes. A small snag in capital equipment can bring production to a halt and compromise the industry’s competitiveness. That’s a very important pillar. The ministry has been working actively with industry associations, including Elcina, for a scheme for component manufacturing. “This is at an advanced stage. It has been a long long wait for the industry. I think it will be out very soon,” he said.
“We will soon come out with this scheme to support component manufacturing, which will support components with a range of incentives designed for the specific components,” he said.
Atul Lall, Managing Director and Vice-Chairman of Dixon Technologies India Ltd, said component manufacture cannot have a single scheme, but needs to be looked at on a case-to-case basis.
Every component sector is different. For example, a module is different from a mechanical one. A mechanical component is different a magnetic one, which is different from a sensor and which is different from a SMT component. Each component category is different. “So it has to be treated differently and we thank the government that they are looking at it differently,’ he said.
Karanbir Singh Brar, General Officer Commanding (GOC) of Dakshin Bharat Area, said electronics is critical to the Defence sector. Electronics would account for 70 to 80 per cent of any weapon system. A few years down the road, it will be all about artificial intelligence, he said. “We have not paid attention to the component part. A strong component ecosystem needs to be developed,” he said.
The country is developing two Defence corridors – one in Tami Nadu and another in Uttar Pradesh.