Budget Allocates ₹9,000 Crore for Electronics Manufacturing PLI Scheme.

The government's latest budget for FY26 has boosted the allocation for electronics manufacturing under the Production Linked Incentive (PLI) scheme to ₹9,000 crore—a 45% increase from last year's ₹6,200 crore, though industry players noted that only ₹5,777 crore was actually expended in the previous cycle.

The scheme's allocation is divided into two parts: ₹8,885 crore dedicated to large-scale electronics manufacturing and ₹115 crore earmarked for IT hardware. In 2023, the Cabinet had doubled the overall outlay for this scheme to ₹17,000 crore, extending the initiative over the next six years to spur domestic production of IT hardware.

Industry bodies such as the India Cellular and Electronics Association (ICEA) and the Indian Electronics and Semiconductor Association (IESA) welcomed the increased focus on the electronics manufacturing sector. However, they expressed disappointment that the budget did not address the need for a dedicated PLI scheme for electronics components or provide clarity on the future of the India Semiconductor Mission.

“This could potentially slow the pace of value addition in India’s electronics ecosystem. We remain optimistic that these aspects will be addressed through specific policy measures beyond the Budget announcement,” said Ashok Chandak, President of the IESA.

Other industry players, including Optiemus Electronics, have emphasized the urgency of launching a PLI for components to reduce reliance on imports from China and Hong Kong. Prior to the budget, the ICEA had recommended a cumulative outlay of around ₹40,000 crore to build a robust components and sub-assembly ecosystem, although no such scheme was detailed in the current budget.

In addition to the PLI scheme, the budget increased funds for the Modified Programme for Development of Semiconductors to ₹7,000 crore, up from ₹3,816 crore in 2024. Despite this boost, the IESA noted that the budget did not elaborate on the India Semiconductor Mission 2.0 (Semicon 2.0), which was announced in September 2024 to further develop India's semiconductor, display manufacturing, and design ecosystem. Ashwini Vaishnaw, Minister of Electronics and IT, had indicated that Semicon 2.0 would be set in motion within three to four months of the announcement, but he refrained from providing additional details.

“The Budget 2025 lacks clarity and is being muted on ISM 2.0—the incentive for semiconductor manufacturing beyond $10 billion that was announced earlier,” Chandak added.

HBL