India's Electronics Sector Prepares for New Investment in Camera and Display Modules to Reduce Component Imports

India's top electronics manufacturers—Dixon, Optiemus, Zetwerk, and Bhagwati—are in discussions with global component producers to form joint ventures and strategic partnerships aimed at introducing advanced technology to the country. Each company is preparing to invest between Rs 800 crore and Rs 1,000 crore to expand local production capabilities.

With the Indian government aggressively pushing for self-reliance in electronics manufacturing, industry players are gearing up to leverage this initiative. | Money Control

Industry leaders are optimistic that the recently approved Rs 22,919 crore Component Manufacturing Scheme will reduce reliance on imports and strengthen India’s position in global supply chains. As leading manufacturers prepare to apply for approvals, they emphasize that the long-awaited scheme will foster domestic value addition (DVA) and attract investments from both global and local players.

They are awaiting the official notification of the scheme and will finalize their application plans once it is announced.

Other Indian firms, such as Amber Enterprises India, Tata Electronics, Chennai-based Munoth Industries, and the Murugappa Group, along with global giants like TDK Corporation, Foxconn (Hon Hai Technology Group), AT&S Austria Technologie & Systemtechnik AG (AT&S AG), and Murata Manufacturing Co., are also expected to participate in the scheme.

Dixon has already started working on the manufacturing of cameras, display modules, and mechanical components under the scheme. Its display module production, in collaboration with China’s HKC, is expected to begin by the third quarter of the next fiscal year. The company is also exploring a joint venture with a global partner for camera module production.

“We are quite positive about this scheme. We need to create a strong component ecosystem because finished product manufacturing has already achieved a certain scale. To make India the next hub for exports, we need a component ecosystem and enhanced value addition,” said Sunil Vachani, Chairman of Dixon Technologies.

“Now we can go full steam ahead and ensure the rapid rollout of these new factories. We want to assure the government and investors that we will commence production very soon,” he stated, further noting that the company is investing approximately Rs 1,000 crore in FY26 for the manufacturing of camera and display modules.

Bhagwati Products Limited, the electronics manufacturing division of Micromax Informatics based in Gurgaon, is currently in advanced discussions with global supply chain companies to form joint ventures.

“As a brand, we are actively pursuing joint ventures within global value chains,” said Rahul Sharma, Co-Founder of Bhagwati Products Limited. “The scheme will play a crucial role in integrating these value chains into India,” he added, noting that the investment will be approximately Rs 1000 crore for the manufacturing of camera and display modules.

A. Gururaj, Managing Director of Optiemus Electronics, highlighted the scheme's potential to enhance India's trade balance and generate job opportunities. “We are looking to start manufacturing display modules, camera modules, and mechanical components in collaboration with leading global suppliers,” he stated.

Industry Outlook and Timeline

Industry executives anticipate that it will take 12-24 months to fully integrate India into global electronics value chains. Although component assembly may occur more quickly, the qualification process for core component technologies is projected to take at least four months.

“The qualification process for components follows a capital cycle. Once capital expenditure is implemented and plants are commissioned, qualification begins, and that can be lengthy,” said Josh Foulger, President at Zetwerk. “Assemblies may qualify more quickly, but component technologies typically require a minimum of four months.”

Zetwerk has allocated Rs 1,000 crore for expanding into component manufacturing and is actively seeking global partnerships to capitalize on the initiative.

As India aims to scale its production to $500 billion to strengthen the electronics manufacturing ecosystem and boost domestic value addition, it is essential to develop a sustainable and competitive ecosystem for electronics manufacturing.

The new scheme will catalyze the industry to deepen integration with Global Value Chains (GVCs), establish large-scale manufacturing units, and enable significant employment generation,” said Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA).

ICEA represents major industry players like Foxconn, Dixon, Apple, Lava, and Xiaomi.

India's mobile and electronics sector has experienced remarkable growth, with domestic production surging by 400%, reaching an estimated $135-140 billion since FY15, based on ICEA's estimates. Currently, India manufactures electronics worth $120 billion and is aiming for a $500 billion electronics economy by 2030.

A significant challenge in this growth path has been low value addition. India still imports essential components such as printed circuit boards (PCBs), passive components (capacitors, inductors, resistors), and display modules, which make up 15-20% of the Bill of Materials (BoM) for electronic products, along with semiconductors.

“The component scheme will accelerate the Make in India initiative, driving higher value addition and strengthening the domestic supply chain with import reductions. Alongside the semiconductor manufacturing ramp-up and the existing PLI for electronics manufacturing, these initiatives will enhance India's global competitiveness,” said Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA).

Government Support and Incentives

On Friday, the Union Cabinet approved a $2.7 billion (Rs 22,919 crore) initiative aimed at enhancing local electronics component manufacturing in India. The program is designed to encourage both domestic and international companies to set up manufacturing facilities, offering subsidies covering up to 50% of project costs.

This six-year incentive program is targeting $7 billion (Rs 59,350 crore) in investments to produce electronics components valued at $53.5 billion. Focus areas include sub-assembly of display and camera modules, printed circuit boards, lithium-ion battery cells, and enclosures for mobile and electronics hardware.

Applicants will be assigned turnover targets to determine their share of incentives, in line with India’s semiconductor incentive framework. The scheme also seeks to localize the production of components and capital goods used in manufacturing, offering capital expenditure-based incentives—although at a rate lower than 50% of the company’s expenses.

With the Indian government’s strong push for self-reliance in electronics manufacturing, industry players are preparing to capitalize on this initiative. If successfully implemented, the Component Manufacturing Scheme could significantly strengthen India’s position in global electronics supply chains, reduce dependency on imports, and create substantial employment opportunities.

(This Article was originally published by Money Control)