Sector snapshot
Foreign manufacturers are investing in electronics, components, semiconductors, capital goods, chemicals and textiles. Central schemes were enlarged in 2026, and the land-border investment rule was eased for priority supply chains.
| Measure | Figure | Source |
|---|---|---|
| Manufacturing FDI, FY2024-25 | USD 19 bn, up 18% on FY2023-24 (USD 16.12 bn) | PIB/DPIIT, 27 May 2025 |
| Electronics goods exports, FY2025-26 | USD 47.96 bn | Invest India |
| Size of India’s chemicals sector | USD 260 bn; USD 383 bn projected by 2030 | Invest India, Chemicals page |
| Electronics manufacturing target by FY2030-31 | USD 500 bn | Government target, per Invest India |
Four developments frame the sector as of 1 October 2026:
- Incentives are being enlarged, not wound down. Budget 2026-27 announced an increase in the Electronics Components Manufacturing Scheme (ECMS) outlay from ₹22,919 crore to ₹40,000 crore. Semicon 2.0, approved on 15 July 2026 and notified on 31 August 2026, carries ₹1.275 lakh crore.
- PLI has already built supplier bases. 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).
- The land-border rule was eased for supply chains. Under Press Note 2 (2026), up to 10% non-controlling beneficial ownership from a land-border country is automatic, and land-border stakes of up to 49% in Indian-controlled companies in priority sectors such as electronic components, capital goods and polysilicon have a 60-day decision target.
- Tax relief for electronics supply chains. The Taxation and Other Laws (Amendment) Act 2026 exempts foreign suppliers’ income from components stored in customs-bonded warehouses for electronics contract manufacturers, until 31 March 2041, subject to conditions.
Where the opportunity is
Foreign capital is going into six manufacturing segments, each with dedicated central support. Figures are as published by Invest India or the Government of India; the year is shown with each.
| Segment | What the sources say | Scheme tags |
|---|---|---|
| Mobile phones and electronics assembly | India is the world’s second-largest mobile phone manufacturer; phone exports were USD 15.5 bn in FY2023-24. Electronics goods exports were USD 47.96 bn in FY2025-26; the Government’s target is USD 500 bn of electronics manufacturing by FY2030-31. | PLI · ECMS |
| Electronic components and sub-assemblies | MeitY had approved 46 ECMS projects in 11 states by February 2026, including 22 projects worth ₹41,863 crore in the third tranche (January 2026). A further 31 projects worth ₹7,877 crore were approved in August 2026. | ECMS |
| Semiconductors: fabs and packaging | Twelve semiconductor units with over ₹1.64 lakh crore of investment had been approved by July 2026: a silicon fab, a silicon carbide fab, a GaN micro-LED display fab and nine packaging units. Semicon 2.0 adds equipment, materials, chemicals and gases. | Semicon 2.0 |
| Capital goods and engineering | Capital goods are 21.5% of manufacturing; output rose from USD 27.6 bn in 2014-15 to USD 51.7 bn in 2023-24. Budget 2026-27 announced a scheme for construction and infrastructure equipment and a ₹10,000 crore container scheme. | SECC Phase II |
| Specialty and performance chemicals | A USD 260 bn sector projected to reach USD 383 bn by 2030 (Invest India). Budget 2026-27 will support states in setting up three plug-and-play chemical parks, selected through a challenge route. | 100% automatic |
| Textiles, technical textiles and apparel | Textile and apparel exports were USD 37.7 bn in FY2023-24. Seven PM MITRA parks are being set up, and Budget 2026-27 proposes Mega Textile Parks in challenge mode, including for technical textiles. | PM MITRA · PLI |
Sources: Invest India sector pages (retrieved 1 Oct 2026); PIB (ECMS backgrounder, 3 Feb 2026; Semicon 2.0, 15 Jul 2026); NeGD (MeitY) and All India Radio, 2 Jan 2026; Business Standard and IMPRI, Aug 2026; Budget Speech 2026-27.
Defence manufacturing is not one of the six segments but appears in the FDI rules and the recent investments list.
How this guide is organised
- Recent investments: the public examples behind recent chip, component and defence projects, with dates and sources.
- FDI rules: caps, routes and conditions for manufacturing, contract manufacturing, chemicals, defence and land-border investors.
- Regulators and registrations: the central filings and state consents a plant needs before start-up.
- Central incentives: ECMS, Semicon 2.0, PLI, rare earth magnets, textiles, ELI, NICDP and the Budget 2026-27 announcements, each with its status as of 1 October 2026.
- State incentives: Tamil Nadu, Gujarat, Maharashtra, Karnataka, Uttar Pradesh and Odisha.
- Tax and zones: bonded manufacturing, the electronics exemptions, customs and SEZ changes in Budget 2026-27, GST rates and the corporate tax tables.
- Set-up roadmap: ten steps from the entry decision to commercial production, plus entry vehicles and incorporation.
- What to watch: ownership tests, scheme milestones and dates that drive most compliance risk.
- Recent changes: what changed since 2025.
- Sources: the full reference list.
Generic entry, tax and people rules live under set-up, tax and people. Scheme windows across all sectors are tracked at the incentive tracker.
Note: Statuses on these pages are as of 1 October 2026. Schemes and policies change frequently and are subject to conditions not reproduced here. Figures are quoted from the sources listed and have not been independently audited.
What to check next
- Confirm which scheme window applies to your product: ECMS now takes only supply-chain and capital-equipment applications, to April 2027; Semicon 2.0 is open for three years from 31 August 2026.
- Map the full ownership chain for any land-border beneficial owner before choosing the FDI route.
- Compare state packages on what they pay, when they pay and which investment dates count.
- Decide whether bonded manufacturing (MOOWR) suits your export and domestic sales split.
- Confirm current scheme terms with the authority before committing capital.