India Gears Up for EMS 2.0 to Strengthen Electronics Manufacturing and Reduce Import Dependency
India is set to enter the next phase of its electronics manufacturing journey—Electronics Manufacturing Services (EMS) 2.0—which will shift focus from assembly to actual component manufacturing, according to a report by Phillip Capital.
While EMS 1.0 primarily emphasized assembling imported electronic components, EMS 2.0 aims to enhance domestic value addition from the current 18-20% to 35-40%. A new Production Linked Incentive (PLI) scheme for electronic components is expected to play a key role in achieving this goal.
India has made significant progress in assembling mobile phones and consumer electronics, but it remains reliant on imports for critical components. EMS 2.0 seeks to localize component manufacturing, reducing costs and mitigating supply chain disruptions caused by tariffs and global uncertainties.
To support this transition, the government had previously introduced SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors), offering a 25% capital expenditure incentive. However, with both the PLI for Large-Scale Electronics Manufacturing (concluding in FY26) and SPECS nearing their deadlines, a new incentive scheme is essential to sustain growth.
By prioritizing component production, EMS 2.0 aligns with India’s vision of becoming a global electronics manufacturing hub. This initiative is expected to drive investment, enhance the domestic supply chain, and position India as a competitive player in the global electronics ecosystem.
Source: The Tribune
