Budget 2026: Finance Minister proposes Rs 40,000-crore Electronics PLI

Finance Minister Nirmala Sitharaman, during her Budget 2026 presentation, proposed an outlay of Rs 40,000 crore for electronics manufacturing under production-linked incentives (PLI) in FY 2026-27. He also said the government will set up high-tech tool rooms at two places to boost production of capital goods, as part of a broader effort to strengthen India’s electronics ecosystem.Follow our live Union Budget 2026 coverage here

According to CareEdge Ratings, electronics manufacturing has been a standout performer under the PLI scheme, especially mobile phones, with production rising 146% from Rs 2.13 lakh crore in FY21 to Rs 5.45 lakh crore in FY25. Growth was supported by $4 billion in foreign direct investment inflows, 70% of which went to PLI beneficiaries.
While total PLI spend across 14 sectors stood at Rs 1.97 billion, cumulative disbursements remained relatively modest at Rs 23.946 billion as of September 2025. Incentives given have grown steadily in the last three years: Rs 2,968 billion in FY 23, Rs 6,753 billion in FY 24 and Rs 10,112 crore in FY 25, Rs 4,113 crore announced in FY 26 in the first half, indicating a strong sales pipeline for the year.

Actual cumulative investments under the program have reached nearly Rs 2 lakh crore, generating incremental production of over Rs 18.7 lakh crore by September 2025.

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Among the sectors receiving the highest allocation, large-scale electronics manufacturing tops the list with Rs 38,645 billion, followed by automobiles and auto parts (Rs 25,938 billion), solar PV modules (Rs 24,000 billion), advanced chemical cell batteries (Rs 18,100 billion) and IT hardware (Rs 17,000 billion).Also Read: Union Budget 2026: Sitharaman announces India Semiconductor Mission 2.0; focus shifts to equipment, intellectual property and supply chains

Other allocations include pharmaceutical drugs (Rs 15,000 billion), bulk drugs (Rs 6,940 billion), telecom (Rs 12,195 billion), food products (Rs 10,900 billion), textiles (Rs 10,683 billion), special steel (Rs 6,322 billion), white goods (Rs 6,238 billion), medical devices (Rs 3,420 billion). crore) and drone components (Rs 120 crore).

Highlighting the long-term growth of the sector, Union Minister of Electronics and IT Ashwini Vaishnaw said that electronics production has increased six times in the last 11 years, while exports have increased eight times. Electronic goods production has increased from Rs 1.9 lakh crore in 2014-15 to Rs 11.3 lakh crore in 2024-25, while exports have increased from Rs 0.38 lakh crore to Rs 3.3 lakh crore.