Rs 3,285 Crore Incentives For Electronic Components and Semiconductors Manufacturing

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  • The Government of India stated that the scheme will help offset the disability of domestic manufacturing of electronic components and semiconductors
  • The scheme might help reduce dependence on import of components by large scale domestic manufacturing

In a bid to improve and strengthen the indigenous manufacturing of electronics components and semiconductors in the country, the Government of India (GOI) has approved a scheme for promotion of manufacturing of electronic components and semiconductors. The total cost of the scheme is approximately Rs 3,285 crore, which includes the incentive outlay of approximately Rs 3,252 crore and the administrative expense to the tune of Rs 32 crore.

“We are confident that the government’s assurance of providing a financial incentive of 25 per cent on capital expenditure for the identified list of electronic goods and components, will not only enable India to become the electronics manufacturing hub of the world but also provide a fillip to its ‘Make in India’ program. All of these steps are going to provide a much needed boost to the sector and help homegrown companies like Goldmedal Electricals expand their business capabilities further,” stated Kishan Jain, director at Goldmedal Electricals.

As per industry estimates, electronics manufacturing has generated employment for over 20 lakh people across the country.

Scheme initially open for three years

This scheme, as the GOI informed, will be open for applications initially for three years from the date of its notification. The incentives will be available for investment made within five years from the date of acknowledgement of application.

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“The scheme will provide financial incentive of 25 per cent on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products, i.e., electronic components, semiconductor/ display fabrication units, ATMP units, specialised sub-assemblies and capital goods for manufacture of aforesaid goods, all of which involve high value-added manufacturing,” read GOI’s official statement.

The government is of the view that the scheme will facilitate new investments in electronics sector to the tune of at least Rs 20,000 crore.

Will cater to all segments of electronics manufacturing

Plant, machinery, equipment, associated utilities and technology, including for R&D of the industrial units making investment for manufacturing of electronic components, semiconductors, ATMP, specialized sub-assemblies and capital goods for these items, in the specified categories, are covered.

This, as per the policy, will cater to all segments of electronics manufacturing such as mobile electronics, consumer electronics, industrial electronics, automotive electronics, medical electronics, strategic electronics, power electronics and telecom equipment, computer hardware among others.

“Reducing dependence on import of components by large scale domestic manufacturing that will also enhance the digital security of the nation,” read GOI’s official statement.

“We hope that the government’s assurance of providing a financial incentive of 25 per cent on capital expenditure for the identified list of electronic goods including electronic components and semiconductors, enable India to become the semiconductor manufacturing hub of the world. This will also benefit indigenous companies like Saankhya Labs by enhancing their business capabilities enabling them to grow and expand further,” stated Parag Naik, CEO & co-founder, Saankhya Labs.

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