NEW DELHI: The government has drawn a hard line in its electronics drive, linking new approvals worth thousands of crore rupees with a blunt warning: Subsidies will not flow to companies that treat India as a factory floor without building design muscle.
Pointing to the shift from volume to strategic value, Union IT Minister Ashwini Vaishnao on Monday said companies under the Electronic Components Manufacturing Scheme (ECMS) must embed design, quality and engineering in India or risk losing support. The warning comes alongside a new set of approvals confirming the scale of the scheme. The ministry has approved 29 new projects involving an investment worth Rs 7,104 crore, taking the total approvals to Rs 61,671 crore – exceeding the initial target of Rs 59,350 crore.Vaishnau pointed to gaps in the industry’s response, saying the pace of enhancing design and quality capabilities has not lived up to expectations. “The real value can only be obtained if the design is done in India,” he said, explaining that the incentives would be linked to deeper technological capabilities.He issued a direct warning that approvals alone do not guarantee financing. “We are prepared to stop any disbursement or further approvals if the industry does not make commensurate efforts,” he said, adding: “With regard to applications that have been approved, we will not even disburse if the applications are not met.”
The scheme now spans 75 orders across 23 product categories and 12 states, with an expected production of over Rs 4.5 lakh crore and employment potential of over 65,000 jobs, according to official data. The latest approvals include India’s first rare earth permanent magnet manufacturing unit, backed by an investment of Rs 700 crore and based on local intellectual property, along with projects in advanced PCBs, capacitors and connectors – sectors aimed at building core electronics capabilities.Even as the pace of approvals increases, the government has tightened compliance. Companies were given 15 days to submit plans addressing four key requirements – product design, Six Sigma quality standards, talent development, and local sourcing.“Manufacturing is easier; translating a design into a reliable product is much more complex,” Vaishnau said, stressing that Six Sigma processes are “essential” to ensuring high-quality production globally.In a letter to industry, the minister said companies that fail to align with the government’s integrated approach risk being “cracked out”, adding that he may skip the next review meeting if progress remains insufficient. The ministry also indicated stricter monitoring of milestones, linking future incentives to measurable results in design capability, localization and quality standards across the electronics value chain.
