Schemes for Electronics Manufacturing in India
- Initiatives like Make in India, Digital India and Startup India have given the much-needed thrust to the Electronics System Design and Manufacturing (ESDM) sector in India. Moreover, the government’s endeavors such as Modified Special Incentive Scheme (M-SIPS), Electronics Manufacturing Clusters, Electronics Development Fund and National Policy on Electronics 2019 (NPE 2019) have been a huge success.
- As a result, India has shown remarkable progress in the sector, India’s production of electronics has increased from USD 29 Bn in 2014 to USD 70 Bn in 2019. From a country that had only two mobile phone manufacturing facilities in 2014, India now stands as the second-largest mobile phone manufacturer in the world.
- To further strengthen the ESDM ecosystem with a complete value chain and position India as the global hub for ESDM, the following schemes have been notified by the Ministry of Electronics and Information Technology (MeitY):
- Production Linked Incentive Scheme (PLI)
- Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)
- Modified Electronics Manufacturing Clusters Scheme (EMC 2.0)
PRODUCTION LINKED INCENTIVE SCHEME (PLI)
- The Production Linked Incentive (PLI) scheme has been notified for Large Scale Electronics Manufacturing in India. The scheme aims to attract large investments in the mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units.
- Under the PLI scheme, 4% to 6% incentive will be provided on incremental sales of goods manufactured in India. These incentives will be offered for a period of 5 years subsequent to the base year (FY 2019-20). The applicant companies will be required to meet minimum thresholds of investment and production and meet the eligibility criteria to receive incentives under the scheme which has an outlay of about USD 5.5 Bn.
SCHEME FOR PROMOTION OF MANUFACTURING OF ELECTRONIC COMPONENTS AND SEMICONDUCTORS (SPECS)
- The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) has been notified with an aim to strengthen the value chain for the manufacturing of electronic products in India. The target segment comprises of the downstream value chain of electronic products, i.e., electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods for the manufacture of aforesaid goods. The scheme will lead to higher domestic value addition and strengthen the existing ecosystem of ESDM in India.
- Under the scheme, financial incentives of 25% will be provided on capital expenditure (on a reimbursement basis) in new units and expansion/ modernization/ diversification of existing units. The scheme will be open for applications for a period of 3 years from the date of notification. All investments made within 5 years from the date of acknowledgement will be eligible for receiving incentives under SPECS which has an outlay of about USD 440 Mn.
MODIFIED ELECTRONICS MANUFACTURING CLUSTERS SCHEME (EMC 2.0)
- The Modified Electronics Manufacturing Clusters (EMC 2.0) scheme has been notified to support creation of quality infrastructure with common facilities and amenities, including Ready Built Factory (RBF) sheds/ Plug and Play facilities. This will attract major global manufacturers along with their supply chains to set up a production base in India.
- Under the scheme, financial assistance of 50% of the project cost will be provided to EMC projects subject to a ceiling of INR 70 Cr for every 100 acres of land while 75% of the project cost will be provided for Common Facility Centres (CFCs) subject to a ceiling of INR 70 Cr. The scheme will be open for applications for a period of 3 years from the date of notification and disbursement of funds to the approved projects will be done in a period of 5 years. EMC 2.0 scheme has an outlay of about USD 500 Mn.