Scheme for electronics manufacturing clusters gets Cabinet nod

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The Union Cabinet has approved scheme for the development of Electronics Manufacturing Clusters (EMCs), reports the Hindu Business Line. The proposed scheme would support setting up of both Greenfield and Brownfield clusters.

“EMCs would aid growth of the Electronics Systems Design and Manufacturing (ESDM) sector, help development of entrepreneurial ecosystem, drive innovation and catalyse the economic growth of the region by increasing employment opportunities and tax revenues,” a Cabinet note said.

Computer and mobile handsets manufacturing can benefit from this scheme because this will make components available locally. These companies are currently importing components from countries such as China and Taiwan.

The scheme is expected to help flow of investment for development of world-class infrastructure specifically targeted towards attracting investment in the ESDM sector, the Cabinet decision said.

Welcoming the approval, Sabyasachi Patra, executive director, Manufacturers’ Association of Information Technology India, said this would help in increasing the flexibility and robustness of the electronic manufacturing ecosystem. “The scheme will lead to innovation and entrepreneurial ecosystem. Thus in the long term, it would give a fillip to growth and development, and employment generation in the ESDM sector,” he said.

The approval also signals to promote domestic manufacturing of electronics by providing support for all parts of the manufacturing ecosystem to co-locate and derive co-location advantages, PVG Menon, President, India Semiconductor Association, said.

He said this would also help the small and medium enterprises sector in electronics grow. It would go a long way in strengthening supply chain for domestic manufacturing of electronics.

“The scheme does not distinguish between Indian and foreign investors. FDI investment into the sector is very welcome and we hope that this will be in the area of high value added manufacturing,” Menon said.

Some of the features of the proposal include assistance to provide special purpose vehicle (SPV) that should be legal entity duly registered for this purpose.

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