Analysis of the Impact of India's Electronic Components Manufacturing Scheme (ECMS) on the Global Electronic Supply Chain

• In March 2025, the Indian Cabinet approved the Electronic Components Manufacturing Scheme (ECMS) with a total budget of 229.19 billion rupees; in April 2025, India’s Ministry of Electronics and Information Technology announced the first batch of 22 approved projects, which are expected to drive investments of 418.63 billion rupees (approximately 4.6 billion USD) and generate an expected output value of about 2.58 trillion rupees (approximately 28.6 billion USD) [1][2][3][4]. The official target is to achieve an electronic manufacturing output value of 500 billion USD by the 2030/31 fiscal year [1].
• The projects cover 11 types of end applications: mobile phones, telecommunications equipment, consumer electronics, automobiles, IT hardware, etc.; focusing on high-value components (such as camera modules, display modules) to reduce import dependence [1][3][5].
• Participating companies include Samsung, Foxconn, Tata Electronics, and Aequs from Apple’s supply chain, indicating that leading international manufacturers are using India’s policy window to expand their localized layout [1][3][5].
• India’s electronic manufacturing output value reached 125 billion USD in the 2024 fiscal year; electronic product exports have grown significantly over the past few years, with trade in electronic products with the US shifting from a deficit to a surplus, driven by mobile devices [1][5].

• Supply chain diversification and regional resilience: Against the backdrop of “de-risking” by European and American customers from Chinese production capacity, India has become one of the key recipients of production capacity for complete machines (such as mobile phones) and components. Apple’s assembly in India accounts for about 14% of global iPhone production and is rapidly increasing, reflecting that the speed of supply chain migration may be faster than expected [5].
• Policy-driven localization capabilities: ECMS uses subsidies and incentives to promote local production of high-end components (such as camera/display modules). If the projects reach production as scheduled, India is expected to extend from simple assembly to mid-upstream links, enhancing its position in the mobile phone, PC/server, automotive electronics, and other chains [1][3][4].
• Changes in market structure: Some mid-to-low-end complete machine and standardized component orders may shift from China and other places to India. ASEAN, Mexico, Vietnam, and India will present a pattern of competition and complementarity in undertaking “China +1” production capacity. Global brand owners will be more inclined to adopt “dual/multi-center” layouts to diversify tariff, geopolitical, and supply disruption risks [5].

• Short-to-medium term impact is limited: Currently, China still has obvious advantages in comprehensive costs, large-scale delivery, upstream supporting facilities, and industrial clusters in the electronic industry chain. It will take time for Indian projects to reach production (expected to be several years), so it is difficult to structurally replace China’s overall export share in the short term [1][3].
• Intensified competition in high-value segments and emerging fields: If India’s policies are continuously implemented, price and order diversion from China will occur in mobile phone assembly and some module segments. At the same time, in India’s rapidly growing demand for automotive electronics, new energy, and infrastructure-related electronics, China and India will engage in more direct competition in component supply and equipment solutions [1][4].
• China’s response paths: On one hand, consolidate high-end manufacturing and upstream segments (semiconductor packaging and testing, power devices, passive components, connectors, PCB, and equipment materials, etc.); on the other hand, accelerate overseas production capacity layout (including setting up factories in India or cooperating with Indian enterprises), and use “globalized local delivery” to get closer to customers and diversify risks. The cost control and technology iteration capabilities of Chinese enterprises remain important moats [4].

• India’s execution and supporting capabilities: Electricity, logistics, talent supply, upstream materials, and local supporting facilities still restrict expansion. Some projects may be delayed or their scale may be less than expected [1][4].
• Geopolitical and trade policy fluctuations: Adjustments to tariff and regulatory policies by Europe and the US on China and India will reshape order flows; if electronic products are included in broader tariff or regulatory lists, it will directly interfere with the rhythm of order and production capacity migration [3][5].
• Capacity and demand mismatch: If terminal demand growth slows down, local overcapacity may occur in global electronic manufacturing, and both China and India need to guard against the risk of over-expansion [1][3].

• Progress of ECMS projects reaching production and actual capital expenditure fulfillment [1][2][4].
• Capacity share and category expansion of Apple and Android camps in India (extending from mobile phones to tablets, PCs, IoT, etc.) [5].
• India’s self-sufficiency rate and quality stability in key modules (camera/display/RF/power management) [1][3].
• Project undertaking and order competition between China and India in automotive electronics, server, and communication equipment components [1][4].
• Impact of changes in global tariff and regulatory policies on regional production capacity layout [3][5].

India’s ECMS investment plan this time is an important step towards “full-chain localization” in the electronic manufacturing field. In the short term, its impact on the global supply chain will still be mainly “partial and gradual”, but in the medium to long term, it will intensify competition in mid-to-low-end complete machines and some high-value component segments, and pose “structural and gradual” pressure on China’s electronic manufacturing industry. The relationship between China and India in the electronic supply chain is shifting from “dislocated complementarity” to “coexistence of complementarity and competition”. Brand owners and suppliers need to carry out more refined “global multi-center” layouts and localized adaptations between cost, risk, and delivery [1][3][4][5].

[1] India Approves Projects Worth $4.64 bn to Boost Domestic Electronics Manufacturing (2025-04), https://telecomlead.com/electronics/india-approves-projects-worth-4-64-bn-to-boost-domestic-electronics-manufacturing-124000
[2] Centre clears 22 projects under electronics components PLI scheme (2025-04), https://m.economictimes.com/industry/cons-products/electronics/centre-clears-22-projects-under-electronics-components-pli-scheme/articleshow/126300752.cms
[3] 印度核准22項、總額46億美元投資案 三星、鴻海入列 (2025-04), https://news.cnyes.com/news/id/6296952
[4] 印度产供链“替代中国”战略评估（摘录）(2025-02), 上海国际问题研究院, https://www.siis.org.cn/updates/cms/cms/202502/24153045u740.pdf
[5] 印度电子业投资正热，全球零部件商加速本土化报道与统计（摘录）(2025), https://www.esmchina.com/news/13714.html