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Manufacturing & Engineering

Central incentives for manufacturers

Central support is largest for electronics, chips and critical inputs. Terms are summarised; the notified scheme guidelines govern eligibility and payment. Several windows have closed and several Budget 2026-27 schemes await guidelines.

₹1.275 lakh crSemicon 2.0 outlay; notified 31 Aug 2026, open for three years
₹40,000 croreECMS outlay after the Budget 2026-27 increase from ₹22,919 crore
₹99,446 croreEmployment Linked Incentive outlay; jobs created to 31 Jul 2027
Apr 2027End of the ECMS window for supply-chain items and capital equipment
Facts as of 1 October 20266 sources citedHow we keep this current

How to read the status column

Status is as of 1 October 2026 and is shown as printed in the brochure. Terms are summarised; the notified scheme guidelines govern eligibility and payment.

StatusMeaning
OpenAvailable or accepting applications
ClosingA stated window or period ends on the date shown
ClosedNo new applicants
AnnouncedAnnounced or approved; check operating guidelines

Windows across all sectors are tracked at the incentive tracker.

Electronics, chips and critical inputs

Central support is largest for electronics, chips and critical inputs.

SchemeWhat the investor getsWho qualifiesStatus
Electronics Components Manufacturing Scheme (ECMS), MeitYTurnover-linked, capex or hybrid incentives over a six-year tenure with a one-year gestation period. Applications opened on 1 May 2025: three months for components and sub-assemblies, two years for supply-chain items and capital equipment. Budget 2026-27 announced an outlay increase from ₹22,919 crore to ₹40,000 crore.Makers of notified sub-assemblies, bare components, supply-chain items and capital equipment, selected by MeitYComponents closed; equipment to Apr 2027
Semicon 2.0 (India Semiconductor Mission 2.0)Support of 40% of eligible capex, on a pari-passu basis, for silicon fabs; 35% for compound, sensor and discrete fabs and for advanced packaging; 25% for legacy packaging; 30% for equipment and component makers. Outlay ₹1.275 lakh crore.Projects meeting minimum investment and capacity tests, for example ₹20,000 crore and 40,000 wafer starts a month for silicon fabs. Design support is limited to Indian-owned and controlled companies.Notified 31 Aug 2026; open for 3 years
PLI: large-scale electronics, IT hardware 2.0 and white goodsProduction-linked incentives for approved applicants; about ₹15,554 crore had been paid under the large-scale electronics and IT hardware schemes (PIB, March 2026).Approved applicants under each schemeApproved applicants only
Sintered Rare Earth Permanent Magnets scheme₹7,280 crore, including sales-linked incentives of ₹6,450 crore over five years and a ₹750 crore capital subsidy, for 6,000 tonnes a year of capacity.Up to five beneficiaries chosen by global bidding (RFP of 20 March 2026), each up to 1,200 tonnes a yearBids closed 12 Aug 2026
PLI for specialty steel, round 3 (PLI 1.2)Production-linked incentives for advanced grades such as super alloys, CRGO and stainless steel long products.Steel makers investing in the identified specialty gradesRound 3 launched 4 Nov 2025

Sources: PIB on ECMS (26 Apr 2025; 3 Feb 2026), PLI (27 Mar 2026), Semicon 2.0 (15 Jul 2026), REPM (26 Nov 2025) and specialty steel; ISM and ANI, 31 Aug 2026; All India Radio, 20 Mar 2026; Fiinews, 14 Aug 2026; Budget Speech 2026-27.

ECMS in more detail

The ECMS window opened on 1 May 2025 with two application periods: three months for components and sub-assemblies, and two years for supply-chain items and capital equipment. The components window has therefore closed, and only supply-chain and capital-equipment applications are taken, to April 2027. Incentives run over a six-year tenure with a one-year gestation period and are paid over the scheme tenure (FY2025-26 to FY2031-32) after claims are verified, not upfront. MeitY had approved 46 projects in 11 states by February 2026; 31 more worth ₹7,877 crore were approved in August 2026. Gujarat pays a 100% top-up on central ECMS support: see state incentives.

Semicon 2.0 in more detail

Semicon 2.0 was approved by Cabinet on 15 July 2026 and notified on 31 August 2026, with applications open for three years from notification. The ₹1.275 lakh crore programme covers chip design, equipment and materials, fabs, packaging, R&D and talent. Capex support is on a pari-passu basis at four levels: 40% for silicon fabs; 35% for compound, sensor and discrete fabs and for advanced packaging; 25% for legacy packaging; 30% for equipment and component makers. Projects must meet minimum investment and capacity tests; the example given for a silicon fab is ₹20,000 crore and 40,000 wafer starts a month. Design support is limited to Indian-owned and controlled companies.

Textiles, capital goods, jobs, industrial cities and exports

SchemeWhat the investor getsWho qualifiesStatus
PLI for textiles (MMF apparel, MMF fabrics, technical textiles)Incentives on incremental turnover; from FY2025-26 at least 10% growth over the previous year is required from year 2.Applicants in the window that ran from August 2025 to 31 March 2026: minimum investment ₹150 crore (Part 1) or ₹50 crore (Part 2)Window ended 31 Mar 2026
PM MITRA textile parksSeven integrated parks covering the value chain from spinning to manufacturing at one location; scheme outlay ₹4,445 crore.Investors taking space in the parksSeven parks being set up
Capital Goods Competitiveness Scheme, Phase II (Ministry of Heavy Industries)Grant-in-aid of up to 80% of project cost for approved projects such as common engineering facility centres, testing and skilling.Industry partners and institutions with approved projectsPhase II notified January 2022
Employment Linked Incentive (ELI)Outlay ₹99,446 crore. Up to ₹3,000 a month per additional employee (pay up to ₹1 lakh) for two years, with a focus on manufacturing; first-time employees get one month’s wage up to ₹15,000.EPFO-registered employers adding at least 2 jobs (under 50 staff) or 5 (50 or more), sustained for six months, between 1 Aug 2025 and 31 Jul 2027Jobs created to 31 Jul 2027
Industrial smart cities (NICDP)12 greenfield industrial nodes in 10 states along six corridors, planned as plug-and-play sites; projects worth ₹28,602 crore approved.Manufacturers taking land in the nodesApproved August 2024
Export Promotion Mission₹25,060 crore for FY2025-26 to FY2030-31, consolidating export support such as trade finance for MSMEs (Niryat Protsahan) and market access (Niryat Disha).Exporters, with a focus on MSMEsApproved Nov 2025; runs to FY2030-31

Sources: PIB on the textile PLI (9 Oct 2025; 2 Jan 2026), ELI (1 Jul 2025), NICDP (Aug 2024) and the Export Promotion Mission (12 Nov 2025); Invest India Textiles page (retrieved 1 Oct 2026); MHI notification (Capital Goods Phase II).

Budget 2026-27 announcements: equipment, containers and clusters

Announced in the Budget on 1 February 2026. Scheme guidelines decide eligibility and timing: check whether they have been issued before planning around these schemes.

SchemeWhat the investor getsWho qualifiesStatus
Container Manufacturing SchemeBudgetary allocation of ₹10,000 crore over five years to build a globally competitive container manufacturing ecosystem.Container manufacturersAnnounced 1 Feb 2026
Construction and Infrastructure Equipment (CIE) schemeSupport for domestic manufacture of high-value equipment, from lifts and fire-fighting equipment to tunnel-boring machines.Equipment manufacturersAnnounced 1 Feb 2026
Chemical Parks schemeCentral support for states to establish three plug-and-play chemical parks, chosen through a challenge route.States; investors locate in the parksAnnounced 1 Feb 2026
Rejuvenation of legacy industrial clustersInfrastructure and technology upgrades for 200 legacy industrial clusters to improve cost competitiveness.Units in the selected clustersAnnounced 1 Feb 2026
Rare Earth CorridorsDedicated corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu for rare earth mining, processing, research and manufacturing.Projects in the four statesAnnounced 1 Feb 2026
Integrated Textile Programme and Mega Textile ParksFive-part programme, including a National Fibre Scheme and capital support for machinery in traditional clusters; Mega Textile Parks in challenge mode.Textile units and clustersAnnounced 1 Feb 2026

Sources: Budget Speech 2026-27, paras 19–26; Invest India Budget 2026-27 page (retrieved 1 Oct 2026).

Context: what PLI has delivered

Production Linked Incentive schemes in 14 sectors had attracted over ₹2.16 lakh crore of investment by 31 December 2025, with cumulative production or sales of over ₹20.41 lakh crore (PIB, 27 Mar 2026). About ₹15,554 crore had been paid under the large-scale electronics and IT hardware schemes by March 2026. The original PLI windows for electronics are closed to new applicants; the open routes for new entrants are ECMS (supply chain and capital equipment), Semicon 2.0 and the Budget 2026-27 schemes once their guidelines are issued.

Check: Sequence matters. Central incentives depend on when investment starts and when applications are filed, so scheme applications come before capital is committed. See step 4 of the set-up roadmap.

What to check next

  • Confirm which window is open for your product: ECMS supply-chain and capital-equipment applications to April 2027; Semicon 2.0 for three years from 31 August 2026.
  • For a Budget 2026-27 scheme (containers, CIE, chemical parks, legacy clusters, rare earth corridors, textiles), check whether operating guidelines have been issued before planning around it.
  • Model working capital on ECMS incentives paid over FY2025-26 to FY2031-32 after claim verification, not upfront.
  • Register with EPFO and plan hiring so that additional jobs created before 31 July 2027 qualify for ELI.
  • Confirm Semicon 2.0 minimum investment and capacity thresholds for your project category with the India Semiconductor Mission.

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