Industry seeks 6% production linked incentive for electronics manufacturing

NEW DELHI: The Manufacturers Association of Information Technology (MAIT) has sought a 6% production linked incentive (PLI) for all electronics categories to “attract the migrating ships of manufacturing leaving China to India’s shores”.

The industry body made the recommendation in a meeting with the Ministry of Electronics and Information Technology (MeitY) on Wednesday.

The body asked for the electronics sector to be categorised as a priority sector, with a “Central National Policy, including land clearances, labour laws, taxation, licenses, incentives” to be put in place. It believes this will give India the ability to be as agile as countries like China and Vietnam with respect to manufacturing of products.

The government had come up with a ₹41,000 crore PLI scheme for domestic manufacturing of mobile phones on April 1. But it seems the industry wants this to be extended to all kinds of manufacturing. The government’s current scheme does involve 4-6% incentive on incremental sales of goods manufactured in India, according to reports.

MAIT reiterated the industry’s ongoing lobbying efforts for the government to include ICT (Information and Communication Technology) and mobile products as essential services. In a statement to the press, George Pal, CEO of MAIT, said, “This is very critical if India is not to tie the hands of its people and industry when restarting the economy.”

The industry wants the government to take “a phased approach”, allowing retail to open in semi-urban areas, towns and through e-commerce in metro areas. “Enterprise ICT sector catering to Data Centers and Control Rooms can be opened up fully as it has limited public interface and will not compromise the fight against covid,” Pal said.

Reports have indicated that supply issues stemming from shutdowns in China due to the covid-19 pandemic have forced companies to look at other countries as alternatives. With India being one of the largest markets in the world, and the government’s focus on making products here, many have said this could be an opportunity for the country.

The industry though has been at a standstill for over a month now, due to nationwide lockdowns thanks to the pandemic. Industry bodies like MAIT and the India Cellular Electronics Association (ICEA) have written to the government to allow the sale and service of such products amid lockdowns in the countrywide lockdowns.