India Announces PLI Scheme for Passive Electronics with INR 229.19 Billion Budget

April 1, 2025 Posted by India Briefing Written by Archana Rao Reading Time: 3 minutes

India has introduced an INR 229.19 billion (US$2.68 billion) Production Linked Incentive (PLI) scheme to enhance domestic electronics manufacturing and reduce reliance on imported components. Announced on March 28, 2025, this initiative marks the first inclusion of passive electronic components under a PLI framework.

India’s central government has approved a Production Linked Incentive (PLI) scheme to foster domestic manufacturing of passive electronic components. Announced on March 28, 2025, by Union Minister of Electronics and IT Ashwini Vaishnaw, the scheme, with a budget allocation of INR 229.19 billion (US$2.68 billion), has received approval from the Union Cabinet, chaired by Prime Minister Narendra Modi.

This decision is expected to substantially reduce India’s reliance on imported components while enhancing the country’s standing in the global electronics supply chain.

Inclusion of passive electronic components within PLI schemes

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This is the first initiative in India to include passive electronic components under a dedicated PLI scheme, marking a strategic shift in the country’s approach to electronics manufacturing. Vaishnaw has said that this segment will be part of the Electronics Component PLI scheme, which will be implemented over six years. The initiative is designed to establish a robust component ecosystem by attracting significant investments from both domestic and international stakeholders.

Passive electronic components are components that do not require an external power source to operate, nor can they amplify or control electrical signals. They only consume, dissipate, or store energy in the form of electric or magnetic fields. These components play a crucial role in electronic circuits by managing signal flow, filtering noise, and storing energy. Some of the common types of passive components include resistors, capacitors, inductors, transformers, etc.

Projected growth and employment opportunities

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According to the announcement made by the central government, investments worth INR 593.50 billion (US$6.94 billion) are expected to be generated through the PLI scheme, with production valued at approximately INR 4.56 trillion (US$53.33 billion). Additionally, it is anticipated that 91,600 direct jobs will be created within the country, along with numerous indirect employment opportunities as the ecosystem expands.

Driving domestic value addition and competitiveness

It is anticipated that the PLI scheme will enhance domestic value addition, enabling the expansion of operations by Indian manufacturers and improving global competitiveness. The initiative is designed to facilitate the production of sub-assemblies, bare components, and the broader supply chain ecosystem, including capital equipment essential for electronics manufacturing. Key sectors expected to benefit include telecom, consumer electronics, automobiles, medical devices, and power, among others.

Industry projections and advocacy for passive electronics

According to a report published on December 9, 2024, the Electronics Industries Association of India (ELCINA) has said that India’s non-semiconductor component production was valued at US$13 billion in 2022, with projections indicating growth to US$20.7 billion by 2026 and reaching US$37 billion by 2030.

The association emphasized that addressing the widening demand-supply gap in the sector is essential for boosting domestic production of non-semiconductor electronic components, which make up 60 percent of the cost of finished electronic products.

Non-semiconductor components are essential for a variety of industries, from telecommunications to consumer electronics. ELCINA believes that without adequate financial backing, India faces a potential US$248 billion deficit in this sector by 2030, largely due to rising demand and continued dependence on imports.

Linking incentives to employment growth

As India shifts away from an import substitution strategy, the focus is now on boosting the production of passive electronic components for both domestic and global markets. To remain competitive in the rapidly evolving global supply chain, India must establish itself as a leading hub for electronics manufacturing.

To ensure accountability and maximize job creation, the scheme ties a portion of the incentive payouts to employment targets. This approach is expected to encourage companies to focus on skill development and workforce expansion, further cementing India’s role in the global electronics sector.

(US$1 = INR 85.49)

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