Union Budget 2026: Govt Raises Electronics Component Scheme Outlay To Rs 40,000 Crore

Presenting her ninth consecutive Union Budget in Parliament on February 1, 2026, Finance Minister Nirmala Sitharaman announced a sharp increase in government support for electronics manufacturing, raising the outlay for the Electronics Component Manufacturing Scheme (ECMS) to Rs 40,000 crore to deepen India’s domestic supply chain.

“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,” Sitharaman said in her Budget speech.

The ECMS was launched on May 1, 2025 with a fiscal outlay of Rs 22,919 crore and targeted investment commitments of Rs 59,350 crore. The application window, initially open for three months, was later extended till September 30, 2025. In all, 249 applications were received, with anticipated investment commitments of around Rs 1.15 lakh crore.

So far, the government has approved 46 projects under the scheme, attracting cumulative investments of Rs 54,567 crore. These projects are expected to generate direct employment for more than 51,000 people and are spread across 11 states, including Rajasthan, Jammu & Kashmir, Uttar Pradesh, Gujarat, Andhra Pradesh, Tamil Nadu, Haryana, Maharashtra, Goa, Karnataka and Madhya Pradesh.

Under the ECMS framework, the government is prioritising domestic manufacturing of high-value electronic components that currently form a large part of India’s import bill. The scheme covers four categories — sub-assemblies, bare components, selected bare components and supply chain ecosystems, and capital equipment. Bare components include passive parts such as capacitors and resistors, while selected bare components are project-specific in nature.

Electronics manufacturing stocks reacted positively to the announcement, with shares of Dixon Technologies, Syrma SGS Enterprises, Amber Enterprises and Kaynes Technology rising as much as 10 per cent in early trade. However, the initial optimism faded as markets turned cautious following the hike in securities transaction tax (STT), triggering a broader sell-off across equities.

The STT on futures has been increased to 0.05 per cent from 0.02 per cent, while the STT on options has been raised to 0.15 per cent from 0.10 per cent. The move is likely to raise transaction costs for traders, particularly in the high-volume options segment and reduce liquidity in the equity derivatives market.