Indian Government to Tackle Chinese Manufacturing Dominance via Incestives

India is set to launch a $5 billion incentive program to boost local production of electronic components, such as printed circuit boards, for gadgets ranging from mobile phones to laptops. The initiative aims to reduce reliance on imports, particularly from China, and strengthen domestic supply chains for the growing electronics manufacturing sector.

India’s electronics production has more than doubled in the past six years, reaching $115 billion in 2024, driven by smartphone manufacturing giants like Apple and Samsung. The country is now the fourth-largest smartphone supplier globally, but the sector faces criticism for its dependency on imported components.

“The new scheme will incentivize the production of key components to increase domestic value addition and deepen local supply chains,” said an official familiar with the plan. The scheme, developed by the electronics ministry, is in its final stages and is expected to be launched within two to three months, pending approval from the finance ministry.

India aims to expand its electronics manufacturing to $500 billion by FY 2030, with $150 billion dedicated to component production, according to the government’s policy think tank Niti Aayog. In FY 2024, the country imported electronics and telecom equipment worth $89.8 billion, with over half of these imports sourced from China and Hong Kong, as per a report by private think tank GTRI.

Industry leaders have welcomed the move. Pankaj Mohindroo, head of India’s Cellular and Electronics Association, remarked, "This scheme comes at a critical time to promote component manufacturing and support the scaling of electronics production to global levels."

The incentive program reflects India’s growing ambition to become a global electronics manufacturing hub while reducing dependence on foreign imports to ensure economic resilience.