Gadget charge: Outlay doubled to Rs 40,000 crore for electronic components

3 min readNew DelhiFeb 2, 2026 06:00 AM IST

In a bid to strengthen India’s domestic supply chains, the Centre will nearly double the outlay for electronics components manufacturing scheme from the current Rs 23,000 crore to Rs 40,000 crore to capitalise on the strong traction the incentive programme has received so far, Union Finance Minister Nirmala Sitharaman said in her Union Budget speech on Sunday.

“The electronics components manufacturing scheme launched in April 2025, with an outlay of Rs 22,919 crore, already has investment commitments and double the targets. We propose to increase the outlay to Rs 40,000 crore to capitalise on this,” Sitharaman said.

The Union Cabinet cleared the scheme last March with an outlay of Rs 22,919 crore. It was expected to generate production of Rs 4.56 lakh crore and bring in incremental investment of Rs 59,350 crore. So far, a total of 46 applications have been approved under the scheme, with a total proposed investment of Rs 54,567 crore, which could generate direct employment for about 51,000 people.

Last month, the IT Ministry approved 22 applications by companies like Foxconn, Tata Electronics, Samsung, Dixon Technologies, and Hindalco Industries. The fresh approvals were in continuation of the clearance for 24 applications announced last year.

The components that the government is looking to target through the scheme include display modules, sub assembly camera modules, printed circuit board assemblies, lithium cell enclosures, resistors, capacitors, and ferrites, among others. These are used in gadgets like smartphones and laptops, and appliances like microwave ovens, refrigerators and toasters, among others.

This incentive scheme differs from the government’s earlier production linked incentive (PLI) scheme for electronics manufacturing in how participating companies can avail subsidies. Incentives have been linked to three key parameters: annual employment generation, capital expenditure needs and annual production.

The components incentive scheme is a crucial next step as the PLI scheme for smartphone manufacturing is nearing its sunset. Despite getting companies like Apple and Samsung to localise some of their overall assembly in India, the domestic value addition has been relatively low — around 15-20% — with the government hoping to raise it to at least 30-40%.

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Of the approved applicants, two of Apple’s key India supply chain partners – Foxconn and Tata Electronics – have been approved to manufacture enclosures for phones and IT hardware. Particularly, it is Foxconn’s Yuzhan Technologies (India) Pvt Ltd, which has received the approval. Motherson Electronic Components has also been approved to manufacture these products.

Soumyarendra Barik is a Special Correspondent with The Indian Express, specializing in the complex and evolving intersection of technology, policy, and society. With over five years of newsroom experience, he is a key voice in documenting how digital transformations impact the daily lives of Indian citizens.
Expertise & Focus Areas Barik’s reporting delves into the regulatory and human aspects of the tech world. His core areas of focus include:

The Gig Economy: He extensively covers the rights and working conditions of gig workers in India.

Tech Policy & Regulation: Analysis of policy interventions that impact Big Tech companies and the broader digital ecosystem.

Digital Rights: Reporting on data privacy, internet freedom, and India’s prevalent digital divide.

Authoritativeness & On-Ground Reporting: Barik is known for his immersive and data-driven approach to journalism. A notable example of his commitment to authentic storytelling involves him tailing a food delivery worker for over 12 hours. This investigative piece quantified the meager earnings and physical toll involved in the profession, providing a verified, ground-level perspective often missing in tech reporting.
Personal Interests Outside of the newsroom, Soumyarendra is a self-confessed nerd about horology (watches), follows Formula 1 racing closely, and is an avid football fan.
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