Guidelines for brownfield EMCs in ESDM sector


A separate set of guidelines will soon be issued for financial assistance to brownfield EMCs

By EB Bureau

The Department of Electronics and Information Technology (DeitY) finally released the guidelines for brownfield electronic manufacturing clusters (EMCs) on January 9, 2013. These will soon be followed by the guidelines for greenfield EMCs as well.

These guidelines are in compliance with the promise made under the Modified Special Incentive Package Scheme (M-SIPS). A separate set of guidelines will soon be issued for financial assistance to brownfield EMCs.


Criteria for brownfield EMCs
The guidelines for brownfield EMCs clearly mention that a cluster will be considered a brownfield EMC if it is a contiguous area (as far as practicable), wherein a number of ESDM units co-exist with potential synergies, which would help the units to produce better results than if each entity was working individually. These units may produce the same or related products; or offer services by using similar inputs or sharing similar processes.

While some brownfield EMCs may be compact, with individual units located over a small and more manageable area, there are others where individual constituent units are spread out and dispersed over a large area. Hence, cluster density would be measured by the number of units in a geographical spread.

A proposed brownfield EMC should ideally have an aggregate annual turnover of at least Rs 10 billion and a minimum of seven units. But with proper justification, even less than seven units would qualify for consideration as an EMC, and smaller units with an aggregate annual turnover less than Rs 10 billion would also be considered.

All ESDM units that share synergies and create positive externalities (an external benefit that is derived by an entity for which it has incurred no cost, or very little expenditure) would be part of the same brownfield EMC, while the units that do not share synergies would be part of different brownfield EMCs, even though such units are geographically collocated.

Environmental concerns that may jeopardise the functioning of these units would be taken into account while notifying the brownfield EMCs.

Application for notifying brownfield EMCs
Companies interested in making an application for notifying a brownfield EMC will have to do so using an application form (see table). DeitY may notify a brownfield EMC for any modifications necessary. Regarding applications that are not submitted by a state government or union territory, DeitY may, in consultation with the relevant state government or the union territory, or with any other authority designated, notify a brownfield EMC for any modifications, if necessary, or seek any additional information. DeitY will also hold the right to conduct an enquiry on an application for notifying a proposed brownfield EMC through an agency.

All applications for notification of brownfield EMCs will be submitted to a nodal officer (M-SIPS) at DeitY.

Role of M-SIPS appraisal committee
All applications for notifying a brownfield EMC would be considered by an M-SIPS appraisal committee, which would be constituted for the purpose. A programme management unit (PMU) may also be formed, which will assist in processing and appraising the applications received under brownfield EMC notification guidelines.

The appraisal committee will consider the applications and make appropriate recommendations to the government regarding the notification of a brownfield EMC. DeitY may process the recommendations of the appraisal committee for approval of the competent authority. On receipt of the approval, DeitY will issue a notification approving the brownfield EMC.

DeitY may also issue supplementary guidelines from time to time for smooth implementation of the scheme. The final decision on notifying brownfield EMCs rests with DeitY.

Application seeking notification of a brownfield EMC
Information required Details required Details required
Proposed cluster Location and brief description of the ESDM, product(s)/service(s)/shared manufacturing process service or shared manufacturing inputs for which the brownfield EMC is proposed

i) Proof of being authorised manufacturing/industrial area

ii) Self attested registration copies of all the constituent units

Applicant Applicant’s name, legal status, address, contact details, details of the authorised signatory Relevant documents to be furnished
Location of cluster Description and area of the geographical spread of the proposed brownfield EMC. Maps to depict location of proposed units within the EMC may be used wherever feasible Relevant maps to be furnished
Constituent units

For each unit please provide;

i) Contact details (name, address, emails, phone, contact person)

ii) Products / manufacturing capacity / services

iii) Annual turnover of last three years as per audited annual reports for the last three years, of all ESDM units in the proposed brownfield EMC

Audited annual reports for last three years of constituent units

Synergies and

positive externalities

Provide the synergies and positive externalities which potentially exist between the units in the proposed brownfield EMC. Describe briefly the synergies in terms of clause 3 of brownfield EMC notification guidelines

Association with scientific, Academic

and R&D institutions

Please provide details of linkages or tie-up of existing units with one or more scientific/academic/R&D institution in vicinity of the proposed brownfield EMC Briefly describe association. Copies of formal arrangement, if any, may be provided
Environmental assessment Please provide details of any environmental concern which may adversely affect the functioning of the Brownfield EMC


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