India will provide incentives of up to $5 billion to local electronics companies to manufacture components for gadgets ranging from mobile phones to laptop computers, said government officials, in an effort to boost the expanding industry and wean off Chinese suppliers.
In the last six years, the electronic manufacturing in India has doubled, with an output of $115 billion in 2024. Global manufacturing companies like Apple and Samsung were the major drivers behind this development in mobile manufacturing.
India is now the world's fourth-largest smart phone supplier.
But the sector faces criticism for its heavy reliance on imported components from countries such as China.
"The new scheme will incentivise production of key components like printed circuit boards that will improve domestic value addition and deepen local supply chains for a range of electronics," one of the two officials said.
The incentives are likely to be offered under a new scheme expected to be launched in two to three months, said the officials, who asked not to be identified as details of the scheme are not yet public.
The plan, designed by India's electronics ministry, has identified components eligible for incentives and is in its final stages. The finance ministry is likely to approve the moves.
India's electronics ministry and finance ministry did not immediately respond to requests for comment.
India is aiming to expand its electronics manufacturing to $500 billion by the fiscal year 2030, including production of components worth $150 billion, as per the government's top policy think tank, Niti Aayog.
According to a report by the private think tank GTRI, India imported $89.8 billion worth of electrical, telecom, and electronics goods in fiscal year 2024, with over half coming from China and Hong Kong.
Head of India's Cellular and Electronics Association, Pankaj Mohindroo, said, "This scheme is coming at a time when it is critical to promote component manufacturing that will help us aim for a global scale of electronics production.”.