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Shares of electronics manufacturing companies were in focus on Tuesday after the government approved seven projects worth Rs 5,532 crore under the Electronics Components Manufacturing Scheme (ECMS). The move is seen as a major boost for domestic component production and import substitution.

Shares of Kaynes Technology India gained 3.36 per cent to trade at Rs 6,964 on NSE, while Syrma SGS Technology jumped 5 per cent to hit Rs 792.70. The rally followed the announcement by the Ministry of Electronics and Information Technology (MeitY) regarding new investments under ECMS.

According to the Ministry of Electronics and Information Technology (MeitY), these projects are expected to generate production worth Rs 36,559 crore and create over 5,100 direct jobs. The approved units are spread across Tamil Nadu (five), Andhra Pradesh (one), and Madhya Pradesh (one), and will manufacture multi-layer printed circuit boards (PCBs), HDI PCBs, camera modules, copper clad laminates, and polypropylene films.

Among the beneficiaries, four projects have been allotted to Bengaluru-based Kaynes Technology, while SRF Ltd, Syrma Strategic Electronics, and Ascent Circuits Pvt Ltd have received one project each.

The ministry said the ECMS has received an “overwhelming response” from both domestic and global investors. So far, 249 applications have been received, representing Rs 1.15 lakh crore investment commitments, Rs 10.34 lakh crore in proposed production, and the creation of 1.42 lakh jobs — the highest-ever investment intent in India’s electronics sector, MeitY added.

Union Minister Ashwini Vaishnaw said the approved projects will help meet 20 per cent of domestic PCB demand and 15 per cent of camera module sub-assembly demand, while copper clad laminate demand will be met entirely through local production. He added that nearly 60 per cent of the total output from these plants will be exported, contributing to India’s electronics export growth.

The ECMS, notified on April 8, 2025, has a total outlay of Rs 22,919 crore and will be implemented over a six-year period. The scheme provides both turnover-linked and capex-linked incentives to approved projects, based on annual performance metrics.

Companies must meet incremental sales, investment, and employment generation targets to qualify for incentives. Any shortfall in employment creation will attract a 1 per cent deduction from eligible benefits. Similarly, capex-linked incentives — based on capital expenditure incurred within five years — will face a 5 per cent reduction if employment goals are not achieved.

Applicants must demonstrate minimum revenue in Electronic System Design and Manufacturing (ESDM) or pure manufacturing for their selected segments. Those under the supply chain and capital equipment categories need to show a net worth equal to at least 50 per cent of the proposed investment, or provide a board resolution confirming funding commitments.

Eligible expenditures include costs related to plant, machinery, tools, dies, R&D, technology purchase, and captive utilities. Freight, transport, insurance, and commissioning expenses are capped at 7.5 per cent of base machinery costs, while technology acquisition is capped at 10 per cent.

The government aims to use ECMS as a key driver to enhance India’s self-reliance in the electronics manufacturing ecosystem and position the country as a global hub for high-value component production.

Abhay Shukla is a Senior Sub-Editor at Zee Business, where he covers the stock markets, corporate news, personal finance, technology, and auto sectors.

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