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The government wants mobile phones to become the largest exported item from India and domestic value addition of 35-40% to mobile manufacturing by 2025. (Photo: Bloomberg)
The government wants mobile phones to become the largest exported item from India and domestic value addition of 35-40% to mobile manufacturing by 2025. (Photo: Bloomberg)

India calls on firms to help them be world champs in electronic manufacturing

  • India's electronics manufacturing was worth 1,90,366 crore in 2014 and has grown to 4,58,000 crore today, while its share in global manufacturing rose to 3% in 2018 from 1.3% in 2012

NEW DELHI: The Centre on Tuesday called firms to apply for schemes to promote electronic manufacturing in India to help them become global champions.

These schemes include production linked (PLI) incentive, component manufacturing schemes (SPECS) and cluster schemes (EMC 2.0), and together amount to 50,000 crore worth of benefits.

Companies can start applying for the schemes beginning today. The application dates are open till 31 July.

IT minister Ravi Shankar Prasad said the government will pick up “five global champions" who will be permitted to participate under the PLI scheme. Five Indian companies will also be added.

India's electronics manufacturing was worth 1,90,366 crore in 2014 and has grown to 4,58,000 crore today, while its share in global manufacturing has risen to 3% in 2018 from 1.3% in 2012, Prasad said. Exports grew by 38% year-on-year between 2018 and 2019.

The government wants mobile phones to become the largest exported item from India and domestic value addition of 35-40% to mobile manufacturing by 2025, he added.

The PLI scheme takes the largest portion of the benefits, standing at approximately 40,000 crore and is expected to help large scale mobile manufacturing. It offers an incentive of 4-6% over a period of 5 years for manufacturing in India.

The base year for this is 2019-20 and the government will incentivise production over and above that baseline through this scheme. The incentive will be applicable from August this year.

The Scheme for Promotion of Manufacturing of Components and Semiconductors (SPECS), is meant to promote component manufacturing in India. This should reduce imports of electronic components, which the industry currently undertakes to assemble products here. This provides a 25% reimbursement on capital expenditure for active and passive components, semiconductors, ATMP and specialized sub assemblies.

This will remain open for three years for investors to apply and for five years for investments. The outlay for the scheme amounts to 3,285 crore.

Lastly, the Electronics Manufacturing Cluster Scheme (EMC 2.0) project adds to a scheme the government already had. It will provide land for large manufacturing clusters, and other infrastructure requirements. The scheme is a modified version of the earlier EMC scheme, work on which has already been done.

According to the government the number of mobile devices produced in the country grew from $2.9 billion to $24.3 billion between 2014-15 and 2019-19. Consumer electronics production grew from $8.5 billion to $11.2 billion in the same period. While today’s schemes are meant to help mobile manufacturing in a big way, the government said sectors like automobile electronics, medical electronics, strategic electronics like defense, have also grown and will benefit from these schemes.

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