New Electronic Component Scheme to Double Local Value Addition to 40% over Five Years: Elcina

Record proposals submitted under India's first scheme for non-semiconductor electronic components are likely to double local value addition in the production of finished goods to up to 40 per cent over the next five years, according to industry body Elcina.

The electronics component makers' body has urged state governments to enhance ease of doing business to support the Centre's Electronics Component Manufacturing Scheme (ECMS).

ECMS has received investment proposals worth Rs 1.15 lakh crore, which is more than double the target of Rs 59,000 crore envisaged under the scheme.

"This is a game changer and has the potential to boost value addition of India's electronics manufacturing eco-system from the current 15-20 per cent to 35-40 per cent over the next 5 years and beyond," Elcina Secretary General Rajoo Goel said in a statement.

A total of 249 companies have submitted applications, which will be screened by a committee before approval.

Union Minister for Electronics and IT Ashwini Vaishnaw on October 2 announced that against a production target of Rs 4,56,500 crore, the proposal has come for manufacturing electronics components worth more than Rs 10,34,000 crore.

The ECMS has received the highest investment proposal of Rs 35,813 crore for enclosures or the body of mobile phones, IT hardware products and other related devices.

At present, Tata Electronics is one of the leading players in the enclosure segment, which manufactures products for iPhones.

Leading segments where players have submitted proposals for big investments include flexible printed circuit boards (Rs 16,542 crore), electro-mechanical components (Rs 14,362 crore), multi-layer PCB (Rs 14,150 crore), supply chain of sub-assemblies and bare components (Rs 9,226 crore), display module sub-assembly (Rs 8,642 crore), camera module sub-assembly (Rs 6,205 crore) and lithium ion cells (Rs 4,516 crore).

Elcina said there are several global companies participating in ECMS.

"Electro-mechanicals, enclosures for IT Products, multi-layer PCBs and flexible PCBs (printed circuit boards) have received the largest value and volume of proposals. Over 100 companies have proposed investments in excess of Rs 65,000 crore in these 3 segments alone," the industry body said.

Investment proposals of Rs 2,103 crore have been received for capital goods used in electronics manufacturing, Rs 1,645 crore for optical transceivers, Rs 1,608 crore in non-SMD passive components and Rs 535 crore for SMD passive components.

Elcina President Sasi Gandhanam said the overwhelming participation in the ECMS shows the rising confidence in India as a manufacturing hub.

"Elcina urges state governments to proactively support this momentum through ease of doing business measures and supportive incentives, which will unlock further investments, generate large-scale employment for the skilled workforce and have a multiplier effect on the economy," Gandhanam said.

Mobile device manufacturers' body ICEA chairman Pankaj Mohindroo said ECMS proposals will lead to the firm establishment of sub-assemblies and components in the country, which substantially increases India's manufacturing prowess and global competitiveness.

"This scheme is secular and horizontal for all verticals of electronics, thereby building core competency and capacity," Mohindroo said.