Assam alternative destination for electronics makers: Himanta Biswa Sarma

Assam the alternative destination for electronics makers

The announcement of the setting up of an outsourced semiconductor assembly and test (OSAT) unit at Jagiroad near Guwahati in Assam has piqued the interest of several domestic and international investors, especially in the electronics manufacturing sector, Assam Chief Minister (CM) Himanta Biswa Sarma said. The Assam CM was in Delhi to talk to investors and companies about the state’s Rs 25,000 crore electronics component manufacturing scheme (ECMS). The scheme envisages offering a top-up incentive of up to 60 per cent to companies that are approved under the central government’s ECMS. In an interview with Aashish Aryan, Sarma said that, akin to the world looking at a China+1 strategy, electronics component manufacturing companies were looking at Assam as an alternative location to set up additional manufacturing units in the country. Edited excerpts:

 

In the electronics manufacturing segment, you compete with the likes of Gujarat, Karnataka, and Tamil Nadu, which have well-established electronics manufacturing ecosystems. What are Assam’s plans to get into that coveted list?

 

You have rightly said that there are disparities and imbalances. Many Indian states have already progressed much faster than others. In the past 10 years, a lot of ground has been covered in terms of infrastructure.

 

There are industries that want to go to different regions of India. Their primary industry or plant may be in Karnataka, but they want another unit somewhere in West Bengal, Assam, or Odisha. We are seeing a positive response.

 

Last week, we signed a memorandum of understanding (MoU) with 11 hotel chains, including Marriott, Taj, and the Radisson Group, for setting up big hotels in Guwahati.

 

In a practical world, people realise that there are advantages to spreading out and not being concentrated in one state.

 

States sign MoUs very often, but many of these agreements never bring fruitful results. Are you looking at result-bound agreements when it comes to Assam and the electronics manufacturing ecosystem for the state?

 

In Advantage Assam 2.0, we were offered MoUs worth Rs 15 trillion. But we decided not to sign all of them. We confined ourselves to Rs 5 trillion, and most of the industries that signed the agreements are now coming, are in the process of setting up, or have already started. We are only targeting what is practical and not living in a utopian world. 

 

Assam has come out with its ECMS. What are the salient features?

 

The scheme is for Rs 25,000 crore, of which we have already disbursed and allocated nearly Rs 8,000 crore. We are not putting any timeline on when this fund will be consumed, because if we get good applications in the next month, we will give these incentives.

 

So, for every Rs 100 that the Centre gives under its ECMS, Assam will give Rs 60. Other than that, we have incentives in the form of tax breaks, state goods and services tax breaks, and concessions on electricity and water charges, among others.

 

Tata is setting up the OSAT at Jagiroad. Around that unit, a lot of ancillary industries are coming up, with someone working on the gas to be supplied, while others are helping with packaging.

 

A lot of these small units are coming up in the Ratan Tata Electronic City, and all these units will be common to other electronics component makers that come to that area. So we are trying to explain to the industry the benefits of co-locating near the Tata unit.

 

What is the total number of jobs that you foresee happening in the electronics sector in Assam over the next few years?

 

Compared to many other manufacturing industries, electronics and semiconductor units create more jobs. There is a need for precision work, but there is a good employment opportunity. If we harness this properly, there can be a lot of employment, and Assam is hopeful of that.