Rs 23K crore electronics PLI scheme set to be rolled out in 3 weeks

Don't want to miss the best from Business Standard?

The government on Tuesday notified the ~22,919 crore scheme to promote domestic manufacturing of electronics components, display and camera modules, non-surface mount devices, multi-layer printed circuit boards and lithium-ion cells for digital applications, among others.

 

The scheme is likely to be operationalised in the next 2-3 weeks.

 

After that, the ministry of electronics and information technology will start accepting applications from companies willing to manufacture in India under the plan, said Union Electronics and Information Technology Minister Ashwini Vaishnaw.

 

The operational guidelines of the scheme will be operationalised within the next couple of weeks after consultation with the industry players, Vaishnaw said.

 

With the introduction of a scheme to promote electronics component manufacturing, the government will hope to complete the trifecta of semiconductor manufacturing, semiconductor component manufacturing and finished products such as mobile phones, laptops, hardware, and other information technology products.

 

“Within a short timeframe, diversity of the manufacturing ecosystem in the country has substantially increased. More than 400 production units, small and big, are there. Like all other industries and several other countries that went through this cycle, it starts with finished goods to begin with. Then, it moves to assembly and then components. We are now at a phase where we are moving to components,” Vaishnaw said.

 

The production and export of electronics components, especially mobile phones, has seen an exponential growth over the last decade, the minister said. He added that while electronics production had seen a compound annual growth rate (CAGR) of 17 per cent, exports had grown at 20 per cent CAGR.

 

During the last financial year, smartphone exports from the country crossed ~2 trillion in value, of which roughly ~1.5 trillion was due to Apple’s flagship iPhone exports from various manufacturing and assembly plants in India, Vaishnaw said.

 

Electronics products exports, including mobile phones, grew 54 per cent year-on-year (Y-o-Y) and have now become among the top exported products from India, he said.

 

Under the new electronics component manufacturing scheme, the government will provide incentives to applicants based on their turnover, capital expenditure for manufacturing of target segment goods and a combination of both these structures, said the official notification.

 

For turnover-based incentive, the government will consider net incremental sales (over the base year) of target segment goods manufactured in the country.

 

For capex-incentive, meeting the investment threshold and commencement of commercial production will be mandatory.

 

The scheme will run for six years with a provision of a gestation period of one year on an optional basis, the notification said.

 

Both greenfield and brownfield applications will be accepted under the scheme with applicants needing to apply separately for each product segment, the gazette notification said.

 

A governing council, chaired by IT secretary, will have representation from other government departments.

 

They include the department of expenditure, the department of economic affairs, the department for promotion of industry and internal trade, the department of telecommunications, and the ministry of heavy industries.

 

The governing council will review reports submitted by the project management agency and make recommendations for approval of applications, the notification said.