India Aims to Strengthen Domestic Electronics Sector with $5 Billion Incentive Program

India is set to introduce a new incentive scheme worth up to $5 billion to support local electronics manufacturers, focusing on the production of key components for devices like smartphones and laptops, government officials told Reuters.

The initiative aims to reduce the country's reliance on Chinese imports and strengthen domestic supply chains in the rapidly growing electronics sector.

India's electronics production has soared to $115 billion in 2024, more than doubling its output over the past six years, driven by global giants like Apple and Samsung. The country has emerged as the fourth-largest smartphone supplier globally. However, the sector remains highly dependent on imports, particularly from China and Hong Kong, which account for more than half of India’s $89.8 billion electronics imports in the fiscal year 2024, according to the Global Trade Research Initiative (GTRI).

The new scheme, led by India’s Ministry of Electronics, will offer incentives to boost the manufacturing of critical components such as printed circuit boards, with the goal of increasing domestic value addition and fostering more localized supply chains. The program, which is expected to be launched in the next two to three months, is pending approval from the Ministry of Finance.

India has ambitious plans to expand its electronics manufacturing sector, aiming for a $500 billion output by 2030, including $150 billion in component manufacturing, as outlined by the government’s think tank, Niti Aayog.
Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association, praised the scheme, calling it "timely" and saying it would help India achieve global-scale electronics manufacturing.

The move is seen as crucial in advancing India's goal of becoming a major player in the global electronics market, especially amid shifting geopolitical and economic dynamics. Neither the Ministry of Electronics nor the Ministry of Finance has commented on the scheme at this time.