Manufacturing Shock Therapy

India is uniquely positioned to benefit from the ongoing global realignment of supply chains, especially amid the US–China trade tensions. The Production-Linked Incentive (PLI) scheme for electronics plays a pivotal role in India’s attempt to emerge as a credible alternative to China. By offering targeted incentives for mobile and component manufacturing, India is strengthening its appeal to multinational companies pursuing a “China plus one” strategy.

Industry experts believe that India’s focused push into electronics manufacturing–especially components and value-added products–offers a chance to build legal and regulatory infrastructure that can support long-term industrial growth. This includes standardised frameworks for contracts, licensing, and dispute resolution tailored specifically for the electronics value chain, allowing India to support not just manufacturing but also design and innovation.

The scheme’s success could lead to a surge in exports, especially as Indian-made components gain a competitive edge in global markets. With supportive demographics, rising domestic demand, and favourable policy direction, India has the potential to shift from being a low-cost assembly hub to a value-driven manufacturing destination.

What sets India apart, as reflected in broader expert opinion, is its strategic focus on nurturing an ecosystem that encourages local innovation, IP creation, and upstream component production. This long-term vision goes beyond replicating China’s model of large-scale assembly and aims to create a sustainable and self-reliant electronics sector.

As Arjit Benjamin notes, “The PLI scheme must be matched with a strong legal backbone and contract enforcement infrastructure. Without such legal underpinnings, manufacturing incentives may only yield short-term gains.” His view reinforces the idea that legal certainty, streamlined compliance, and dispute resolution tailored to the manufacturing sector are essential pillars for India’s ambition to become a trusted global electronics hub.