Apr 06:The government of India’s goal is to make India a significant design and manufacturing hub for electronics as part of its Atmanirbhar Bharat economic policies. In this regard, we are broadening and deepening our electronic manufacturing ecosystem. Over the last five years, the production and export of electronic goods is as under:
Values in INR crore
*Source: Directorate General of Commercial Intelligence and Statistics (DGCIS)
**Source: Annual Report of Ministry of Electronics and Information Technology
The steps taken by Government to make India a significant design and manufacturing hub by broadening and deepening the electronic manufacturing ecosystem are annexed.
The government has notified schemes in order to boost electronics manufacturing in the country and incentivize large investments in the electronics value chain. The details of the schemes and the number of beneficiary companies are as under:
- Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing: The scheme was notified on 1st April 2020. PLI Scheme extends an incentive of 6% to 4% to eligible companies on incremental sales (over the base year) of goods under target segments (mobile phones and specified electronic components) that are manufactured in India, for a period of five (5) years subsequent to the base year (FY 2019-20). As of date, 32 companies have been approved under the PLI Scheme for Large Scale Electronics Manufacturing.
- Production Linked Incentive Scheme (PLI) for IT Hardware: The scheme was notified on 3rd March 2021. The PLI Scheme extends an incentive of 4% to 2% / 1% to eligible companies on net incremental sales (over base year i.e., FY 2019-20) of goods under target segments that are manufactured in India, for a period of four years (FY 2021-22 to FY 2024-25). The target IT hardware segments under the Scheme include Laptops, Tablets, All-in-One Personal Computers (PCs), and Servers. Incentives are applicable under the Scheme from 01.04.2021. As of now, 14 companies have been approved under the PLI Scheme for IT Hardware.
- Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS): The scheme was notified on 1st April 01, 2020. It provides a financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise the downstream value chain of electronic products, i.e., electronic components, semiconductor/display fabrication units, ATMP units, specialized sub-assemblies, and capital goods for manufacture of aforesaid goods. As of now, 23 applications have been approved by the executive committee.
- Modified Special Incentive Package Scheme (MSIPS)- The scheme was announced in July 2012 and subsequently been amended in August 2015 and in January 2017. It provides a subsidy of 20-25% on capital expenditure. It has been closed on 31st December 2018 to receive new applications. As of now, 313 applications have been approved under the scheme.
Steps were taken by the Government to promote the electronics hardware manufacturing sector in the country
- National Policy on Electronics 2019: The National Policy on Electronics 2019 (NPE 2019) has been notified by the Ministry of Electronics and Information Technology (MeitY). The vision of NPE 2019 is to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.
To attract and incentivize large investments in the electronics value chain and promote exports, the following Schemes have been notified:
- Production Linked Incentive Scheme (PLI)for Large Scale Electronics Manufacturing notified vide Gazette Notification No.CG-DL-E-01042020-218990 dated April 01, 2020, provides an incentive of 4% to 6% to eligible companies on net incremental sales (over the base year) involved in mobile phone manufacturing and manufacturing of specified electronic components, including Assembly, Testing, Marking, and Packaging (ATMP) units, for a period of five (5) years.
- Production Linked Incentive Scheme (PLI) for IT Hardware notified vide Gazette Notification No.CG-DL-E-03032021-225613 dated March 03, 2021, provides an incentive of 4% to 2% / 1% on net incremental sales (over the base year) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four (4) years. The Target Segments under PLI Scheme include (i) Laptops (ii) Tablets (iii) All-in-One PCs and (iv) Servers.
- Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme notified vide Gazette Notification No.CG-DL-E-01042020-218991 dated April 01, 2020, provides support for the creation of world-class infrastructure along with common facilities and amenities, including Ready Built Factory (RBF) sheds / Plug and Play facilities for attracting major global electronics manufacturers along with their supply chain to set up units in the country. The Scheme provides financial assistance for the setting up of both EMC projects and Common Facility Centres (CFCs) across the country.
- Semiconductor and Display Manufacturing Schemes: The Union Cabinet chaired by Hon’ble Prime Minister Shri Narendra Modi approved the comprehensive program with an outlay of INR 76,000 crore (> USD 10 billion) on 15.12.2021 for the development of robust and sustainable Semiconductor and Display ecosystem in the country whereby the following schemes were introduced:
- Semiconductor & Display Fabs scheme extends financial support for setting up Semiconductor & display Fab which is aimed at attracting large investments for setting up semiconductor wafer fabrication facilities and display panels in the country and thus helping in the establishment of a trusted value chain.
- Compound Semiconductors / Silicon Photonics / Sensors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT Facilities Scheme extends fiscal support of 30% of the Capital Expenditure investment for setting up of the said facilities.
- Design Linked Incentive Scheme offers financial incentives, design infrastructure support across various stages of development, and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores, and semiconductor linked design.
- Approval was granted for the setting up of India Semiconductor Mission (ISM) as an Independent Business Division within Digital India Corporation having administrative and financial autonomy to drive India’s strategies for developing semiconductors and display manufacturing ecosystem. Envisioned to be led by global experts in the Semiconductor and Display industry, the ISM will serve as the nodal agency for efficient, coherent, and smooth implementation of the schemes centered around the Semiconductors and Display ecosystem, in consultation with the Government ministries/departments/agencies, industry, and academia.
- 100% FDI: As per extant Foreign Direct Investment (FDI) policy, FDI up to 100% under the automatic route is permitted for electronics manufacturing (except for countries sharing land borders with India), subject to applicable laws/regulations; security, and other conditions.
- The Phased Manufacturing Programme (PMP) has been notified to promote domestic value addition in mobile phones and their sub-assemblies / parts manufacturing. As a result, India has rapidly started attracting investments into this sector and significant manufacturing capacities have been set up in the country. The manufacturing of mobile phones has been steadily moving from Semi Knocked Down (SKD) to Completely Knocked Down (CKD) level, thereby progressively increasing the domestic value addition.
- Tariff Structure has been rationalized to promote domestic manufacturing of electronic goods, including, inter-alia, Cellular mobile phones, Televisions, Electronic components, Set-Top Boxes for TV, LED products, and Medical electronics equipment.
This information was given by the Minister of State for Electronics & Information Technology, Shri Rajeev Chandrasekhar in a written reply to a question in Lok Sabha today.
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