India’s ECMS 2025: Application Window Opens May 1 – Incentives and Eligibility for Manufacturers

India has launched the Electronics Component Manufacturing Scheme (ECMS), with applications opening on May 1, 2025. The incentive distribution will be carried out by the central government on a “first-come, first-served” model.

We provide a comprehensive overview of the scheme guidelines, the components covered, eligibility criteria, and possible outcomes of the initiative

On April 26, 2025, India launched guidelines and an online portal for the Electronics Component Manufacturing Scheme (ECMS). The INR 229.19 billion (US$2.7 billion) initiative, seen as a step toward bolstering electronics production in India, aims to attract large-scale investments, boost domestic manufacturing, and enhance the country’s integration into global value chains.

As per the announcement, the scheme is set to run from FY 2025–26 to FY 2031–32, including a one-year gestation period and will support the development of a comprehensive supply chain for electronics manufacturing. The initiative also seeks to increase domestic value addition and position Indian companies as key players in global electronics markets.

Application window for target segments

The scheme will begin accepting applications from May 1, 2025, via its online portal: www.ecms.meity.gov.in. To ensure prompt participation from interested manufacturers, the scheme adopts a first-come, first-served model for incentive distribution.

Interested stakeholders must note that the ECMS scheme is aimed at four target segments.

Source: Gazette notification, Ministry of Electronics and Information Technology, GoI

*Application window for Segment A, B and C can be extended further. It may also be reopened for applications at  anytime during its tenure based on the response from the industry and budget availability.

**Under target segment D, the applications received under the scheme shall be appraised on an ongoing basis and implementation shall proceed as per the approvals agreed under the scheme. The fiscal support shall be available for investment made within five years from the date of acknowledgement of the application.

Types of incentives offered under ECMS

The ECMS offers three types of financial incentives to support eligible companies. These are as follows:

1. Turnover-linked incentive: This incentive is calculated as a percentage of the increase in sales (turnover) over a company’s base year. It applies only to sales of eligible products made in India and covered under the scheme.

The incentive rate varies by product, as prescribed by the central government in its official notification. To a company to avail this incentive, it must meet two criteria:

• A minimum level of increased sales.
• A minimum level of cumulative investment.

Additionally, 1 percent of the incentive rate is linked to employment creation.

If the company does not meet employment requirements, the total incentive will be reduced by 1 percent.

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Under target segments A, B and C, if the applicant chooses to opt for turnover linked incentive, the first year for the purpose of incremental sales would be counted from April 1, 2025, to March 31, 2026. For those opting for a gestation period, this would be taken from April 1, 2026, to March 31, 2027. Further, the cumulative incremental investment shall be counted from the date of scheme notification

2. Capex incentive: This incentive supports spending on eligible capital equipment and infrastructure used to manufacture the specified products in India. To receive it, companies must:

• Meet the minimum investment requirement.
• Have started commercial production.

In addition, of the total 25 percent capex incentive, 5 percent is tied to job creation. If a company fails to meet the employment threshold, the total incentive will be reduced by 5 percent.

3. Hybrid incentive: This is a combination of both turnover-linked and capex incentives, tailored to support specific high-priority products under the scheme.

Source: Press Information Bureau

*These incentives are calculated as a percentage of the incremental turnover over a defined base year and are applicable for six financial years, subject to meeting investment and employment thresholds.

Eligibility and components coverage under ECMS

To qualify under the ECMS, applicants must meet the following requirements:

1. Greenfield as well as brownfield investment for the target segment shall be eligible under the scheme.
2. An applicant shall submit separate applications for each target segment products.
3. An applicant making multiple applications for the same product covered under the target segment shall not be eligible.
4. The qualifications of applicants shall be decided on consolidated global Electronics System Design and Manufacturing (ESDM) revenue or manufacturing revenue/technological and financial capability and shall be detailed in the scheme guidelines.

*This is an illustrative list and is not a complete list of supply chains.

Expected outcomes: Larger investments, more job creation

The scheme aims to attract investments worth INR 593.5 billion (US$6.99 billion), generate production output of INR 4.56 trillion (US$53.77 billion), and create 91,600 direct jobs, along with substantial indirect employment opportunities across the electronics value chain.

Structured strategy for India’s electronic sector expansion

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The Union Minister for Electronics and Information Technology (MeITY) Ashwini Vaishnaw noted that India initially focused on assembling finished goods, which account for 80 to 85 percent of the value chain, before advancing to module and component manufacturing. He claimed the sector is now transitioning toward producing base materials essential for component manufacturing.

Since 2015, India’s electronics production has grown fivefold, while exports have increased by more than six times. The export compound annual growth rate (CAGR) of electronics components has surpassed 20 percent, with production growth exceeding 17 percent, driven largely by robust performance in mobile phones, laptops, servers, and IT hardware.

Click here to know more on India’s Electronics Manufacturing: Challenges and Opportunities

Multi-sectoral support and quality enhancements

Vaishnaw emphasized that the ECMS scheme will support not only the electronics sector but also automotive, industrial, and power industries. He stressed the need for domestic companies to build in-house design capabilities and aim for “Six Sigma” quality benchmarks, warning that substandard performance will not be accommodated under the scheme.

India has outlined a strategic framework under ECMS, which includes a unique hybrid incentive structure. Unlike traditional models, ECMS links fiscal incentives to both turnover and capital expenditure. This approach is designed to drive employment generation, economic growth, and deeper industrial integration.

Conclusion

By targeting key components and sub-assemblies and offering a well-structured blend of fiscal incentives, the scheme is designed to plug critical gaps in the supply chain, reduce import dependency, and enhance domestic value addition.

Coupled with a clear implementation roadmap and sector-specific support, ECMS is expected to catalyze high-impact investments, drive innovation, and create robust employment opportunities across industries. With its strategic integration into global value chains and focus on quality and scale, India is poised to emerge not just as a manufacturing hub, but as a key player in shaping the future of global electronics.

(US$1 = INR 84.80)

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