Hyderabad to host electronics industry cluster

Hyderabad is all set to host an electronics city – an electronic hardware manufacturing cluster – on a 500-acre plot of land located close to the international airport. The land was part of a 1,200-acre Fab City project proposed some four years back, which failed to take off for a variety of reasons.

The cluster will be driven by homegrown players, all in the small and medium-scale category. These companies are also looking at possible collaborations with players from Taiwan, Japan and South Korea. The cluster will be provided with infrastructure and e-waste management facilities.

“The 500-acre plot has just got de-notified from the SEZ (special economic zone) area and the process of allotments to electronics units has already been initiated,” said

N Siva Prasad, president of the Electronics Industries Association of Andhra Pradesh (ALIAP).

The government has set up a single-window facility for all clearances, including allotment of land for those planning to set up units in the cluster. The land is enough for about 200 units of all sizes, from micro to medium, according to ALIAP.

The new facility will also give a chance to enter into collaborations and joint ventures with electronics hardware manufacturers in countries like Taiwan, according to Prasad. His association has been working with its counterparts in Taiwan and Japan, among other countries, to bring business delegations to Andhra Pradesh to explore collaborative opportunities.

The state government had recently announced the electronics hardware manufacturing policy while offering various incentives to the units, including sales tax reimbursement. The industry association, however, is seeking a flat five-year tax holiday for the new units in place of the present VAT (value-added tax) reimbursement scheme, which it considers time-consuming.

These units will also avail themselves of capital subsidy announced under the M-SIPS (modified-special incentive package scheme) by the Central government in July 2012. Electronics manufacturing units will get a 25 per cent subsidy in project cost if they are located in the domestic tariff area. The subsidy is 20 per cent for export units located in an SEZ.

About 29 categories of products are eligible for the M-SIPS incentives, including IT hardware, consumer electronics, medical electronics, solar photovoltaic and semiconductor chips and chip components, among others.