Tamil Nadu Govt. Unveils New Policy For Electronics And Hardware Manufacturing

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  • The state hopes to contribute 25 per cent of India’s total electronic exports to the world by 2025
  • All incentives offered by the state government to units in the electronics manufacturing industry shall be in addition to the incentives offered by the government of India to those units
  • The government is also reported to formulate a special package of incentives for ESDM units in the MSME sector
  • The state has also claimed to support start-ups in the electronics and hardware space by promoting the development and acquisition of IPs in ESDM sector

According to a report, Tamil Nadu Government has announced a new electronics and hardware manufacturing policy to increase the States’s electronics industry output to $100 billion by 2025. The state hopes to contribute 25 per cent of India’s total electronic exports to the world by 2025. 

The policy also undertakes skill training for more than 100,000 people (semi-skilled and skilled) by 2024. This would help to meet the incremental human resource requirement projected the NSDC for Tamil Nadu in Electronics and hardware Manufacturing sector.

It also targets to increase the level of value addition that is done in Tamil Nadu, especially across focus sectors such a mobile handsets, LED products, chip designs, PCBs, solar photovoltaic cells, medical electronics, and automotive electronics. 

National Policy Of Electronics 2019

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In loop with the National Policy Of Electronics 2019, the state government has claimed to provide additional support for developing core competencies in the sub sectors. The other prime areas are yet to be undertaken for focused research and development program to achieve the above objectives, and foster an environment of research and innovation.

A foster and conducive environment for ESDM Start-ups is also required. This would help in promoting the rapid growth of innovation-led technology enterprises involves in the design, development and manufacturing of technologically advanced solutions and to attract at least two major FAB investments to Tamil Nadu in the next three years. 

Eligible Investments 

As mentioned in the policy, all incentives offered by the state government to units in the electronics manufacturing industry shall be in addition to the incentives offered by the government of India to those units. Investments made from January 1, 2020 will be considered eligible for availing incentives.

The government is also reported to initiate a special package of incentives for ESDM units in the MSME sector. This will include capital subsidy, interest subvention, low tension power tarred subsidy, generator subsidy, assistance for obtaining intellectual property and assistance in obtaining certifications. MSMEs will also be assisted to scale up their business to serve as a vendor base for large and Mega Investors in this sector.

Core Investments 

For core investments the policy has classified districts in namely three categories. For investments worth Rs 200-500 crore capital subsidy in category A district would be 15 per cent, in category B district 20 per cent and in C category district 25 per cent. 

For investments over Rs 500 crore capital subsidy in A district would be 18 per cent, B district 24 per cent and in C district 30 per cent. For eligible projects in ELCOT /SIPCOT/ SIDCO or any other government-owned industrial parks in C districts, land allotment will be made at 50 per cent subsidised rate for land up to 20% of EFA.

The government has also announced stamp duty exemption, training subsidy, interest subsidy, exemption of electricity tax, environmental protection infrastructure, subsidy for intellectual capital, etc.

Mega Electropreneur Centre 

The state is also looking forward to set up a Mega Electropreneur Centre (MEC) in the form of a Centre of Excellence for Hardware, Products & Ventures to facilitate easy access and to make it practical to build a robust ecosystem for start-ups and entrepreneurs. This CoE shall include a fully self-contained facility to support end-to-end design, development, testing & certification of innovative hardware products, the policy stated.

The state has also claimed to support start-ups in the electronics and hardware space by promoting the development and acquisition of IPs in ESDM sector. This would also support well-functioning ATAL Tinkering Labs for the procurement of new, electronic equipment, establish a cloud server to connect all the incubation centres across the state and make it available to all the start-ups, at low or nominal costs.

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