Dixon Expands into Components; Tata May Invest Rs 2,000 Cr Under ECMS

Dixon Technologies is stepping into the electronics components manufacturing sector as part of its growth strategy. A senior company official revealed that Dixon will initially produce components for its own use before expanding to supply other companies and explore exports.

The announcement came after the launch of guidelines of the Electronics Components Manufacturing Scheme (ECMS). There is a possibility that Tata Electronics might also invest around Rs. 2,000 crore under the scheme, however, there is no official confirmation yet.

Dixon CEO Atul Lal said that a project has already been started for display modules and areas like camera modules, mechanical enclosures, and lithium-ion batteries are being explored. “Evaluation is being done and we will be actively participating in ECMS,” Lal said. Initially, the production will meet internal needs but later expand to serve global markets. “We are going beyond captive use and India and Dixon will be globally competitive in some of the components,” he added.

Dixon has also started producing laptops for HP. Till now, the company was manufacturing smartphones for companies like Motorola, Xiaomi, and Vivo. The government recently approved the ECMS scheme with an outlay of Rs 22,919 crore, aimed at creating over 91,000 jobs and attracting investments worth Rs 59,350 crore.

Union Minister Ashwini Vaishnaw emphasized that companies applying under ECMS must have a design house and meet Six Sigma quality standards.

Talking about the impact ECMS will make, ICEA Chairman Pankaj Mohindroo said: “Value addition from India will be enhanced through the electronics components manufacturing. Financial analysts must stop viewing it as a low-return factor. This scheme will be value accretive in long term and make manufacturing sustainable.”

Source: The Economic Times