Budget 2026: Indian smartphone manufacturers react to ECMS, say impact depends on 'effective implementation'

Union Budget 2026: The Indian government has signalled a significant shift in its electronics strategy with the announcement of Budget 2026–27. Finance Minister Nirmala Sitharaman has expanded the Electronics Components Manufacturing Scheme (ECMS) to Rs 40,000 crore, a move aimed at deepening the domestic supply chain and transforming the nation from an assembly hub into a high-value manufacturing powerhouse.

In her speech, Sitharaman said, "The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of Rs 22,919 crore, already has investment commitments at double the target. We propose to increase the outlay to Rs 40,000 crore to capitalise on the momentum."

Industry leaders and manufacturers have welcomed the increased outlay, viewing it as a critical step for the sector’s maturity. Sanjeev Agarwal, Executive Director & Chief Manufacturing Officer at Lava International Limited, told Business Today that the expansion is an "encouraging move to strengthen India’s electronics manufacturing ecosystem".

However, he noted that the success of the policy would depend on practical execution. "For ECMS to deliver its intended impact, it will be important to ensure that the necessary infrastructural enablers are set up, along with timely and effective implementation," Agarwal stated.

Madhav Sheth, CEO of Ai+ Smartphones and Founder of NxtQuantum Shift Technologies, remarked that the budget is a "decisive signal that India is now playing for depth, not just scale".

Sheth emphasised that this strategy is vital for "de-risking investments in components like display assemblies, camera modules and advanced PCBA". He added that for his firms, the budget provides the "runway to deliver on our core belief—‘Made in India’ must mean ‘Designed in India’".

The budget also introduces Semiconductor Mission 2.0 (ISM 2.0), which targets equipment, materials, and Indian-owned Intellectual Property (IP). 

Anku Jain, Managing Director of MediaTek India, told Business Today that ISM 2.0 is a "strong step towards building India as a global semiconductor hub". Jain iterated that the government is "fostering an environment to boost innovation and design" by prioritising domestic equipment manufacturing and full-stack Indian IP.

Market analysts suggest that the new measures will broaden India's manufacturing capabilities into more complex technologies. Tarun Pathak, Research Director at Counterpoint Research, told Business Today that the budget "accelerates 'Make in India' into its next phase".

Pathak pointed out that localising the production of display modules and passive components is essential to increase value addition. He noted that a stronger component base would allow India to move "beyond smartphones and into high-growth sectors like AI servers, robotics, and PCs". To achieve this, Pathak stressed that "addressing the current lack of a Tier-1 ecosystem for multi-layer PCBs, advanced sensors, passives, motors and others is critical" to the success of the expanded Rs 40,000 crore outlay.

Jasbir Singh, Executive Chairman and CEO, Amber Enterprises, said, “We welcome the government’s decision to increase the investment outlay for the Electronic Components Manufacturing Scheme (ECMS) to Rs 40,000 crores. Cementing this further, the decision to establish high-tech tool rooms to manufacture high-precision components at scale and lower cost will propel India to become self-reliant and globally competitive. Furthermore, rejuvenating 200 legacy industrial clusters will also boost the EMS sector. These policies will increase the EMS contribution to the GDP, expected to be the third-largest. Additionally, the 7 high-speed rail corridors for passenger movement will not only deliver connectivity and fast mobility but also provide the necessary tailwinds for domestic manufacture of railway components. At Amber Enterprises, we welcome the decisions tabled in this Union Budget, and look forward to strengthening India's component manufacturing ecosystem.”