Key features, eligibility and implementation

POLICY AT A GLANCE

Item	Position
Official title	Uttar Pradesh Electronics Component Manufacturing Policy, 2025
Notification date	September 4, 2025
Effective date	April 1, 2025
Administrative department	Department of Information Technology and Electronics, Uttar Pradesh
Nodal agency	Uttar Pradesh Electronics Corporation Limited
Policy period	Six years, from April 1, 2025 to March 31, 2031
Main objective	Promote domestic manufacturing of specified electronic components and reduce dependence on imported inputs
Principal beneficiaries	New and expanding electronics component manufacturing units located in Uttar Pradesh
Main incentives	State top-up matching the Union government’s Electronics Component Manufacturing Scheme, 20 per cent capital subsidy for certain units outside the central scheme, and additional localisation incentives
Current status	Policy notified and operational framework established; Invest UP currently lists it as amended
Application mechanism	State application and approval through the nodal agency, alongside a separate Union government application where central incentives are sought

The Uttar Pradesh government notified the policy on September 4, 2025, but made eligible capital expenditure incurred from April 1, 2025 claimable under the framework. The Uttar Pradesh Electronics Corporation states that the policy will remain valid until March 31, 2031.

What is the Uttar Pradesh Electronics Component Manufacturing Policy?

The policy provides financial and administrative support for companies manufacturing specified electronic components in Uttar Pradesh. It is intended to deepen the state’s electronics supply chain beyond the assembly of finished products such as mobile phones and consumer devices.

The framework works alongside the Union Ministry of Electronics and Information Technology’s Electronics Component Manufacturing Scheme, or ECMS. Companies approved under the central scheme may receive a corresponding state top-up for eligible investment and production undertaken in Uttar Pradesh. Companies manufacturing eligible components but not receiving central ECMS support may instead qualify for a separate state capital subsidy, subject to the policy’s conditions.

The policy is supplementary to the Uttar Pradesh Electronics Manufacturing Policy, 2020, rather than a complete replacement for it. Eligible component manufacturers may also receive specified benefits carried forward from that earlier framework.

Why was the policy introduced?

Uttar Pradesh has developed a sizeable electronics manufacturing base around Noida, Greater Noida and the Yamuna Expressway Industrial Development Authority region. However, much of India’s electronics industry remains dependent on imported components, raw materials and production equipment.

The state policy seeks to address this gap by encouraging local production of display and camera modules, printed circuit boards, lithium-ion cells, passive components, enclosures and inputs used in electronics manufacturing.

It was designed after the Union government notified the ECMS on April 8, 2025. The state government positioned its policy as an additional incentive layer intended to make Uttar Pradesh more competitive for investments approved under the central scheme while also supporting qualifying projects that do not secure central assistance.

What are the main objectives?

The policy seeks to:

Attract domestic and international investment in electronics component manufacturing;
Reduce import dependence for selected components and production inputs;
Support local production of printed circuit boards, display modules and lithium-ion cells;
Create skilled and semi-skilled employment;
Develop a supplier base for large electronics manufacturers already operating in Uttar Pradesh;
Encourage research, development, start-ups and micro, small and medium enterprises;
Promote greater domestic value addition within the electronics supply chain;
Use existing electronics clusters, industrial parks and the Uttar Pradesh Defence Industrial Corridor to support component manufacturing.

The policy also links electronics component manufacturing with the state’s wider objective of expanding electronics production by 2030. This is a policy ambition rather than a verified production outcome.

Which components are covered?

The policy covers specified products grouped broadly into sub-assemblies, bare components, selected advanced components and supply-chain inputs.

Eligible products include:

Display module sub-assemblies;
Camera module sub-assemblies;
Non-surface-mount passive components;
Electro-mechanical components for electronic applications;
Multi-layer printed circuit boards;
Lithium-ion cells for digital applications, excluding mobility and energy-storage uses;
Enclosures for mobile phones, information technology hardware and related products;
High-density interconnect, modified semi-additive process and flexible printed circuit boards;
Surface-mount passive components;
Parts and components used in manufacturing the specified sub-assemblies and bare components;
Production equipment, including relevant sub-units and components, used in electronics manufacturing.

Eligibility is tied to the precise component categories listed in the policy and its annexures. Manufacturing a product that is merely related to electronics does not automatically make a project eligible.

Who is eligible?

Both greenfield and brownfield projects can apply.

A greenfield project is a new manufacturing unit. A brownfield project may involve expansion, modernisation or diversification of an existing unit.

The manufacturing facility must be located within Uttar Pradesh. Investment and turnover considered for incentives must relate only to the eligible component manufactured by the unit in the state. An applicant must submit a separate application for each target component category.

Where a company receives central ECMS incentives, the corresponding investment and sales must arise from its Uttar Pradesh unit for it to qualify for the state top-up. A company cannot use investment or turnover generated in another state to establish eligibility under this policy.

What financial incentives are available?

The policy creates two principal incentive routes.

State top-up for projects approved under the central ECMS

A unit receiving an incentive under the Union government’s ECMS may receive an equivalent state incentive for eligible investment and turnover attributable to its Uttar Pradesh facility.

The state benefit is intended to match the applicable central incentive for the relevant component category. However, the combined central and state incentive cannot exceed 100 per cent of the unit’s eligible capital investment.

The actual incentive rate and performance conditions therefore depend partly on the category under which the Union government approves the project.

Capital subsidy for units not receiving ECMS support

A unit manufacturing an eligible component but not receiving central ECMS support may qualify for a capital subsidy equal to 20 per cent of eligible capital investment.

Twenty per cent of the total sanctioned capital subsidy is linked to achievement of the applicable employment threshold. A unit that begins commercial production but does not fulfil the prescribed employment condition may receive the subsidy after a corresponding 20 per cent reduction.

The scheme is therefore broader than a simple state top-up. It also creates a separate route for projects that fall outside the central scheme or are not selected by the Union government, provided they meet the state’s eligibility conditions.

Additional localisation incentives

The policy provides further incentives for selected components where specified materials are sourced or manufactured domestically:

Component	Additional incentive
Lithium-ion cells for eligible digital applications	Additional 2 per cent for domestic sourcing or manufacturing of cathode active material
Multi-layer printed circuit boards	Additional 1 per cent for domestic sourcing or manufacturing of laminates

The full additional benefit applies where the eligible material is sourced or manufactured within Uttar Pradesh. Where the source is in another Indian state, the unit may receive only 50 per cent of the specified additional incentive. Partial domestic sourcing attracts the benefit on a proportionate basis.

Treatment of land and buildings

For units receiving the state’s 20 per cent capital subsidy rather than an ECMS-linked top-up, specified expenditure on newly purchased land and newly constructed factory buildings may be included in eligible capital investment.

The admissible amount is limited to the lower of:

30 per cent of eligible fixed capital investment excluding land and buildings; or
Rs 50 crore.

Existing land, existing buildings and construction expenditure incurred before the policy’s effective date are not eligible under this provision.

Other benefits

Eligible units may also qualify for benefits available under the Uttar Pradesh Electronics Manufacturing Policy, 2020, as amended. The policy identifies these categories:

Stamp-duty benefits;

Land subsidy of 25 per cent on land allotted by development authorities or state agencies;
Land subsidy of up to 50 per cent in Bundelkhand and Purvanchal;
Electricity-duty exemption;
Interest subsidy;
Patent-cost reimbursement;
Skill-development assistance;
Employees’ Provident Fund reimbursement;
Lease-rental support;
Logistics subsidy;
Research and development assistance.

The applicable rate, ceiling, duration and conditions for each benefit must be verified from the Electronics Manufacturing Policy, 2020, its amendment and the current implementation guidelines. They should not be assumed solely from the list reproduced in the component policy.

How will incentives be disbursed?

For ECMS-approved units, the applicant must apply to the state as well as to the Union government. After receiving the central sanction or disbursement, the unit must inform the state and submit its state claim within the prescribed process.

State top-up incentives of up to Rs 50 crore may be disbursed in one instalment. Where the amount exceeds Rs 50 crore, the policy provides for annual instalments capped at Rs 50 crore.

For units receiving the separate 20 per cent capital subsidy, 60 per cent of the eligible subsidy may be released in the first instalment, subject to a ceiling of Rs 30 crore. The balance is to be disbursed in subsequent years according to the policy and implementation guidelines.

The policy also provides for deduction of an administrative charge equal to 2 per cent of the approved financial benefit for the nodal agency.

How can an applicant access the benefits?

The Uttar Pradesh Electronics Corporation Limited is the nodal agency. It is expected to function as the single point of contact and establish a dedicated project management unit for processing proposals and supporting implementation.

A Policy Implementation Unit examines proposals, recommends approvals, processes incentive disbursement and monitors investment, employment, production and domestic value addition. A state-level empowered committee chaired by the chief secretary oversees implementation and resolves interdepartmental issues.

Projects involving investment of up to Rs 200 crore may receive a Letter of Comfort after the Policy Implementation Unit’s recommendation and approval by the departmental minister. Projects above Rs 200 crore require recommendation by the empowered committee and approval by the state Cabinet.

The policy states that detailed implementation guidelines are to be issued separately. A complete current list of application documents and a publicly accessible state application form could not be identified in the official material reviewed.

Applicants seeking the state top-up must also separately apply through the Union government’s ECMS portal. The central application window has varied by target segment, so businesses must verify whether the relevant component category remains open before structuring an application around the combined central-state benefit.

Implementation and progress so far

The state Cabinet approved the policy in September 2025, and the formal notification was issued on September 4, 2025. The Uttar Pradesh Electronics Corporation subsequently published a dedicated policy page and identified itself as the nodal agency.

Invest UP currently lists the policy as the Uttar Pradesh Electronics Component Manufacturing Policy, 2025 (First Amendment). However, a separate consolidated English text identifying the precise clauses changed by the first amendment could not be independently examined from the official documents available during this review. Applicants should therefore obtain the current consolidated policy and amendment order from the nodal agency before relying on any incentive calculation.

No consolidated official data were identified on:

Applications submitted under the state policy;
Letters of Comfort issued;
Projects approved;
State incentives sanctioned or disbursed;
Investment realised;
Component production commenced;
Employment generated.

The existence of the policy and project announcements in the electronics sector should not be treated as evidence that benefits have already been approved under this particular policy.

How does the policy support Uttar Pradesh’s wider economic strategy?

Uttar Pradesh already hosts major mobile-phone and consumer-electronics manufacturers. The component policy seeks to build a deeper local supplier ecosystem so that more inputs are produced within the state rather than imported or transported from other regions.

The state top-up may improve the commercial case for large projects approved under the Union government’s ECMS, while the separate 20 per cent capital-subsidy route may accommodate smaller or otherwise eligible projects that do not secure central assistance.

The policy’s localisation incentives also attempt to encourage production of upstream materials, particularly cathode active material and printed circuit board laminates, rather than limiting support to final component assembly.

Key challenges and limitations

Dependence on the central scheme: The most substantial top-up benefits depend on approval under the Union government’s ECMS. Closure of a central application window may restrict access to this route for some component categories.

Complex incentive calculations: Eligibility differs according to component type, central approval status, investment, production, employment and domestic sourcing. Businesses will require the implementation guidelines to calculate benefits accurately.

Risk of duplicate claims: Investment or sales already incentivised under another Uttar Pradesh government scheme cannot be claimed again under this policy. Applicants must provide an undertaking on this point.

Localisation requirements: The additional incentives for lithium-ion cells and printed circuit boards depend on the source of cathode active material and laminates. Supply-chain documentation will therefore be important.

Limited implementation disclosure: Official project-level data on approvals, production and disbursement were not available in the sources reviewed.

What businesses should keep in mind

A prospective applicant should first identify the exact target component and determine whether it is applying through the ECMS-linked route or the state-only capital-subsidy route.

It should also verify:

Whether the relevant Union government application window is open;
Whether the project is greenfield or an eligible brownfield expansion;
Which expenditure qualifies as capital investment;
Whether land and building costs can be included;
The applicable investment, production and employment conditions;
Whether domestic sourcing qualifies for an additional incentive;
Whether any expenditure has already received assistance under another state scheme;
The current first-amendment text and implementation guidelines;
The authority required to approve the Letter of Comfort.

Eligibility and benefits remain subject to the notified policy, subsequent amendments, applicable government orders and approval by the competent authority.

FAQs

What is the main purpose of the policy?

It seeks to promote manufacturing of specified electronic components in Uttar Pradesh and increase domestic value addition in the electronics supply chain.

Who can apply?

New and expanding manufacturing units located in Uttar Pradesh and producing an eligible component listed in the policy may apply, subject to category-specific conditions.

What is the principal state incentive?

Units approved under the Union government’s ECMS may receive a matching state top-up. Other qualifying units may receive a 20 per cent capital subsidy.

Can a unit receive both the state top-up and the separate 20 per cent capital subsidy?

No. The separate 20 per cent capital-subsidy route is intended for eligible units not receiving the central ECMS incentive and corresponding state top-up.

Are land and building costs eligible?

They may be partly eligible for state-only capital-subsidy projects, subject to the lower of the prescribed 30 per cent limit or Rs 50 crore. This provision does not apply in the same way to ECMS-linked projects.

Which agency implements the policy?

Uttar Pradesh Electronics Corporation Limited is the nodal agency.

How long will the policy remain valid?

The official policy period runs from April 1, 2025 to March 31, 2031, subject to amendments and the operative conditions linked to the Union government’s ECMS.

Conclusion

The Uttar Pradesh Electronics Component Manufacturing Policy, 2025 seeks to move the state’s electronics sector from finished-product assembly towards deeper component and material manufacturing. Its central feature is a state incentive matching the Union government’s ECMS, supplemented by a 20 per cent capital subsidy for certain projects outside the central scheme.

The framework covers a wide range of components and offers additional incentives for local sourcing. However, its practical value will depend on detailed implementation guidelines, access to the central scheme, accurate classification of eligible investment and timely state approvals. Project approvals, incentive disbursement, domestic value addition and operational component capacity will be the principal indicators to monitor.

Sources

Approval for promulgation of the Uttar Pradesh Electronics Component Manufacturing Policy, 2025, Department of Information Technology and Electronics, Government of Uttar Pradesh; notification dated September 4, 2025.

Uttar Pradesh Electronics Component Manufacturing Policy, Uttar Pradesh Electronics Corporation Limited, Government of Uttar Pradesh; official policy page.