India's electronics manufacturing sector to see a surge in jobs with new incentive schemes

Industry executives have highlighted that the newly announced employment-linked incentive schemes will significantly bolster India's US$ 500 billion electronics manufacturing sector by 2030. However, there is uncertainty about whether these benefits will extend to contractual employees, as many original equipment manufacturers (OEMs) depend on third-party staffing firms for hiring. Secretary General of the Electronics Industries Association of India (ELCINA), Mr. Rajoo Goel, noted that domestic manufacturing capacities are expected to grow substantially over the next 6-7 years, potentially creating 1 million new direct jobs by 2026 and up to 5 million by 2030. ELCINA estimates that an additional US$ 36 billion in investments will be required by 2030.

Union Minister for Finance and Corporate Affairs, Ms. Nirmala Sitharaman's recent budget speech, introduced 3 new employment-linked incentive schemes aimed at first-time employees, supporting workers and employers. Scheme B, targeting bulk hiring in manufacturing, will benefit 3 million new hires over 2 years with an outlay of US$ 6.21 billion (Rs. 52,000 crore). Employers hiring 50 workers or 25% more than the previous year will receive an incentive of 8-24% of wages, shared equally between the employer and employee. Chief Strategy Officer at Teamlease Mr. Sumit KKumar, projected that these allocations could drive industry growth and help achieve the US$ 500 billion target by 2030, potentially creating 5.5-6 million direct jobs. The India Cellular and Electronics Association (ICEA) expects the sector to need 4-5 million new workers by 2030. However, there remains a grey area concerning the inclusion of contractual workers in the scheme, with further details expected as the scheme is finalized for implementation in October.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.