Govt seeks inputs on plan to boost electronics industry

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The government has sought comments on a revised incentive plan aimed at giving the country’s electronics industry a boost that’s expected to make it globally competitive. The changes to the proposal include investor-friendly measures such as a sharp lowering in the proposed investment threshold, it is reported.

EB Bureau

Thursday, September 20, 2012: This follows Cabinet approval in July for a Rs.10,000 crore incentive package under the so-called Modified Special Incentive Package Scheme (M-SIPS) for makers of electronics products and components.

India’s electronics manufacturing industry is projected to grow at an annual pace of 22% to $125 billion (Rs.6.8 trillion) by 2014 and $400 billion by 2020, according to government estimates. If local manufacturing is not incentivized, India’s cost of importing electronics may exceed its crude import bill—$300 billion by 2020.

It has been reportedly said that India is aiming for electronics manufacturing revenue of around $400 billion by 2020 from investment of around $100 billion, according to the National Electronics Policy 2011, as part of which the government announced the measures aimed at reducing the dependence on imports. The guidelines show that the government is serious about attracting investment in the electronics space, said industry experts. The M-SIPS scheme is the modified version of a policy announced in 2007 that failed to get off the ground despite the government having received 26 project proposals involving a total investment of Rs.2.29 trillion.

Under the modified policy, companies that invest in special economic zones (SEZs), export-oriented industrial enclaves, will get a 20% subsidy on capital expenditure; those operating outside SEZs will get 25% support. “Most of the problematic clauses in the earlier version have been done away with,” said an official at a consultancy firm that has been playing an advisory role in the area of electronics manufacturing, it is reported.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine

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