- What Is the Electronics Components Manufacturing Scheme?
- How Does the ECMS Scheme Work?
- Where Does Syrma SGS Fit Into ECMS?
- Syrma SGS Is Moving Deeper Into the Electronics Value Chain
- Why Could Backward Integration Matter for Syrma Investors?
- Why ECMS Matters Beyond Syrma SGS
- But Government Approval Does Not Automatically Mean Higher Profits
- Author’s Take
Syrma SGS Technology has come into focus after the government approved another project involving the company under the Electronics Components Manufacturing Scheme, or ECMS.
The latest Syrma project involves around ₹60 crore of investment for manufacturing coils, an electronic component used across several types of electronic equipment.
On its own, ₹60 crore may not look particularly significant for Syrma SGS. But the approval becomes more important when viewed alongside the company's earlier ECMS projects in printed circuit boards and related components.
It also highlights a bigger shift taking place in India's electronics manufacturing industry.
India has already become a major location for assembling smartphones and other electronics. The next challenge is to manufacture more of the components that go inside these products domestically.
That is exactly what the ECMS scheme is trying to achieve.
What Is the Electronics Components Manufacturing Scheme?
Over the past decade, India's electronics manufacturing industry has expanded rapidly.
Electronics production increased from around ₹1.9 lakh crore in FY15 to ₹13.11 lakh crore in FY26. Electronics exports also increased substantially, reaching around ₹4.24 lakh crore.
India now manufactures almost all the mobile phones sold domestically.
But there is an important difference between manufacturing an electronic product in India and manufacturing its components in India.
Consider a smartphone.
A company may assemble the final phone in an Indian factory, but several components inside it, such as display modules, camera modules, printed circuit boards, capacitors and other electronic components, may still come from suppliers outside India.
The electronics manufacturing value chain can broadly be understood as:
Raw materials → Electronic components → Sub-assemblies → Final product assembly
India has made considerable progress at the final assembly stage. ECMS is designed to strengthen the layers underneath it.
The scheme provides financial incentives to companies willing to manufacture electronic components and important materials in India.
The government's original ECMS outlay was ₹22,919 crore, with an investment target of ₹59,350 crore. The scheme outlay was subsequently increased to ₹40,000 crore.
Therefore, ECMS represents the next stage of India's electronics manufacturing strategy.
The objective is no longer only to say that a smartphone, laptop or other electronic product was assembled in India. The government wants a larger share of the components inside those products to also be manufactured domestically.
How Does the ECMS Scheme Work?
Unlike a simple subsidy where every manufacturer receives the same benefit, ECMS provides different incentives depending on the type of component being manufactured.
Some manufacturers receive incentives linked to their incremental turnover. Others can receive support linked to the capital expenditure required to establish manufacturing facilities. Certain categories can receive a combination of both.
For example, products covered by the scheme include printed circuit boards, camera modules, display modules, capacitors, connectors, coils and other electronic components.
This structure is important because different parts of electronics manufacturing have different economics.
Some component businesses need large production volumes to become competitive. Turnover-linked incentives can help manufacturers scale these businesses.
Other components require significant upfront investment in specialised plants and machinery. Capex incentives can make these investments more attractive.
In simple terms, the government is trying to reduce some of the initial disadvantages Indian component manufacturers face while competing with established manufacturing ecosystems in countries such as China.
Where Does Syrma SGS Fit Into ECMS?
The latest approval is for Syrma SGS to invest around ₹60 crore in manufacturing coils.
Coils and inductors are passive electronic components used for functions such as controlling electrical current, filtering signals and managing power across electronic devices.
Under ECMS, this category can receive turnover-linked incentives over several years, provided manufacturers meet the required investment and production conditions.
The incentive rates for this category can start at around 8% of eligible incremental turnover in the first year and gradually decline over the incentive period.
However, the ₹60 crore investment should not be confused with the incentive Syrma will receive.
The company must first make the required investments and achieve eligible production. The eventual incentive depends on the conditions prescribed under the scheme.
More importantly, this is not Syrma's first ECMS-linked investment.
| Syrma project | Strategic importance |
| Multi-layer PCBs | Moves Syrma into manufacturing a critical component used across electronics |
| Flexible and HDI PCBs | Expands the company into more advanced PCB categories |
| Copper-clad laminates | Adds an important raw material used in PCB manufacturing |
| Coils | Expands Syrma further into electronic component manufacturing |
Together, these projects provide a much better picture of what Syrma appears to be building.
Syrma SGS Is Moving Deeper Into the Electronics Value Chain
Syrma SGS is primarily an electronics manufacturing services, or EMS, company.
In simple terms, customers can outsource the manufacturing and assembly of electronic products to companies such as Syrma.
But an EMS company generally needs to purchase several components before assembling the final product.
Suppose Syrma manufactures an electronic product for a customer. It may purchase a PCB and various electronic components from suppliers, assemble them and deliver the finished product.
Now consider what happens if Syrma manufactures some of these components itself.
Instead of participating mainly in the assembly stage, the company starts capturing a larger portion of the manufacturing value chain.
That is why Syrma's investments in PCBs, copper-clad laminates and coils are strategically important.
The company is effectively trying to move from Electronics assembly towards Components plus PCBs plus electronics assembly
This is known as backward integration.
Why Could Backward Integration Matter for Syrma Investors?
The first potential benefit is higher value addition.
If Syrma purchases most components from external suppliers, a significant part of the value of the final product goes to those suppliers. Manufacturing more components internally can allow Syrma to capture a greater share of that value.
The second potential benefit is better control over the supply chain.
Electronics manufacturers can be vulnerable to shortages, long lead times and dependence on imported components. Domestic component capacity could reduce some of this dependence.
The third opportunity is potentially more interesting.
Syrma does not necessarily have to manufacture these components only for its own EMS business.
If its PCB and component facilities become competitive, it could potentially supply components to other electronics manufacturers as well.
That would create a separate source of revenue alongside its existing EMS operations.
Syrma has itself positioned its PCB expansion as backward integration that could increase domestic value addition and improve its position within the electronics manufacturing value chain.
Why ECMS Matters Beyond Syrma SGS
The bigger ECMS story is that India is trying to address one of the weaknesses in its electronics manufacturing growth.
India has successfully attracted substantial final-product manufacturing. But building a complete electronics ecosystem requires component suppliers to develop around those assembly plants.
Think about the automobile industry.
A car manufacturer does not manufacture every component itself. An entire ecosystem of tyre manufacturers, battery companies, component suppliers and other businesses develops around automobile production.
Electronics manufacturing works similarly. If India wants to become a major global electronics manufacturing hub, assembling phones and laptops is only the first stage.
It also needs companies making PCBs, capacitors, displays, camera modules, connectors, enclosures and hundreds of other components.
ECMS is trying to accelerate the creation of that supplier ecosystem. And the scheme is already attracting investment beyond its initial targets.
Following the latest approvals, investments approved under ECMS have reached around ₹69,548 crore, compared with the scheme's original investment target of ₹59,350 crore.
Expected production from these projects has reached approximately ₹5.34 lakh crore, compared with the original target of around ₹4.57 lakh crore.
The government has also indicated that several approved facilities have already started manufacturing, while others are under construction or installing machinery.
This makes ECMS increasingly important for understanding the next phase of India's electronics manufacturing story.
But Government Approval Does Not Automatically Mean Higher Profits
This is an important distinction for Syrma SGS investors. ECMS can improve the economics of setting up manufacturing capacity, but an approval itself does not create earnings.
Syrma still needs to build these facilities, bring machinery online, qualify products with customers and scale utilisation.
Component manufacturing can also require substantial capital investment. For example, Syrma's earlier multi-layer PCB project alone involved proposed cumulative investment of around ₹765 crore. The company has also discussed significant additional investment related to flexible and HDI PCBs and copper-clad laminates.
Therefore, investors need to watch whether the additional capital invested generates sufficient revenue and returns.
A factory operating at high utilisation can generate very different economics from the same factory operating significantly below capacity.
Execution will therefore matter more than the number of ECMS approvals.
Author’s Take
Syrma SGS’s latest ₹60 crore coil project is not significant because of its size. It matters because it adds another layer to the company’s broader move from electronics assembly towards deeper component manufacturing.
The opportunity is clear. If Syrma can manufacture more PCBs, PCB materials and electronic components internally, it can increase value addition, reduce dependence on external suppliers and potentially build a higher-quality revenue mix over time.
However, this strategy also changes the nature of the business. Component manufacturing requires heavier capital investment, longer ramp-up periods and strong capacity utilisation to generate attractive returns.
That is why ECMS incentives should be seen as an enabler, not the investment thesis itself. The real test will be whether Syrma can convert these subsidised investments into meaningful revenues and improve returns on capital.
If execution remains strong, ECMS could help Syrma evolve from an EMS player into a more integrated electronics manufacturing platform. But if new capacities remain underutilised, the same expansion could put pressure on capital efficiency.