Question 1

India currently manufactures its own advanced semiconductor chips independently under this scheme.

Accepted Answer

India's current footprint is heavily concentrated in Outsourced Semiconductor Assembly and Test (OSAT) and component manufacturing. It still relies on imports for actual raw wafer fabrication, though ISM aims to build this capacity.

Question 2

The ECMS covers all types of lithium-ion battery manufacturing in India.

Accepted Answer

The scheme explicitly limits its incentives to lithium-ion cells used for digital applications, explicitly excluding cells meant for electric mobility or large-scale storage.

Question 3

Consider the following statements regarding the Electronics Component Manufacturing Scheme (ECMS) 2025:
1. It introduces a hybrid incentive structure that includes both capex and turnover-linked incentives for specific components.
2. A portion of the incentive payout under the scheme is linked to the achievement of incremental employment targets.
3. The scheme provides financial incentives for the manufacturing of lithium-ion cells meant for electric vehicles and grid storage.
How many of the above statements are correct?

Accepted Answer

(b) Only two — Statement 1 is correct; ECMS provides differentiated incentives including turnover-linked, capex, and hybrid incentives depending on the product category. Statement 2 is correct; the payout is uniquely linked to meeting employment thresholds. Statement 3 is incorrect; the scheme specifically covers lithium-ion cells for digital applications and explicitly excludes mobility and storage cells.

Question 4

Match the following target segments under ECMS with their corresponding incentive categories or eligibility:
List I (Target Segment)
A. Display and Camera module sub-assemblies
B. High-density interconnect (HDI) and flexible PCBs
C. Capital equipment for electronics manufacturing
D. Lithium-ion cells for electric mobility

List II (Incentive Category / Eligibility)
1. Capex incentive
2. Turnover-linked incentive
3. Not eligible under ECMS
4. Hybrid incentive

Accepted Answer

(a) A-2, B-4, C-1, D-3 — Under the ECMS guidelines: Display and camera modules (Sub-assemblies) receive turnover-linked incentives (A-2). Selected bare components like HDI and MSAP flexible PCBs receive hybrid incentives (B-4). Capital equipment for the supply chain gets capex incentives (C-1). Lithium-ion cells for EVs (mobility) are completely excluded from ECMS (D-3).

Question 5

Assertion (A): The Electronics Component Manufacturing Scheme (ECMS) incorporates an optional one-year gestation period for calculating incremental sales and investment.
Reason (R): Manufacturing of upstream components like multi-layer PCBs and passive components requires highly capital-intensive machinery and significant setup time before commercial production can commence.

Accepted Answer

(a) Both A and R are true and R is the correct explanation of A — Both statements are true. ECMS provides an optional 1-year gestation period precisely because the target segments (unlike simple final assembly of mobile phones) involve complex, time-consuming greenfield or brownfield investments in specialized capital equipment. R perfectly explains the rationale behind A.

Launch Of Electronics Component Manufacturing Scheme

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