Electronics components manufacturing scheme
The Indian government has launched several key schemes to boost Electronics Components Manufacturing and strengthen the domestic electronics ecosystem.
The most prominent current schemes are the Production Linked Incentive (PLI) scheme and the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).
1. Production Linked Incentive (PLI) Scheme
The PLI scheme for Large Scale Electronics Manufacturing aims to attract large investments in the electronics value chain and incentivize substantial production growth.
Key Features:
- Incentive Type: Offers a financial incentive as a percentage of the incremental sales of manufactured goods (over a base year).
Target Segments:
- The scheme specifically targets the manufacturing of mobile phones and specified electronic components, including:
- Passive components (resistors, capacitors, etc.).
- Printed Circuit Boards (PCBs) and materials (laminates, prepregs).
- Sensors, transducers, and actuators.
- Assembly, Testing, Marking, and Packaging (ATMP) units.
Objective: To position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging large-scale, high-value manufacturing and exports.
2. Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)
SPECS aims to offset the disabilities faced by domestic manufacturers by providing financial support for capital expenditure.
Key Features:
- Incentive Type: Provides a financial incentive of 25% on capital expenditure (on a reimbursement basis).
- Scope: Applicable to investments in new units, as well as the expansion, modernization, or diversification of existing units.
Target Segments: Specifically focuses on the downstream value chain of electronic products, including:
- Electronic components.
- Semiconductor/display fabrication units.
- ATMP (Assembly, Testing, Marking, and Packaging) units.
- Specialized sub-assemblies and capital goods.
Objective: To create a robust, deep, and sustainable supply chain for the electronics manufacturing ecosystem in India.
Other Related Initiatives
The government also supports electronics manufacturing through other related programs:
- Electronics Components Manufacturing Scheme (ECMS): This is a key initiative under the Ministry of Electronics and Information Technology (MeitY) that specifically focuses on core components and materials like multi-layer PCBs, camera modules, copper clad laminates, and polypropylene films to reduce import dependence.
- Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme: Provides financial assistance for the development of world-class infrastructure and common facilities in Electronics Manufacturing Clusters (EMCs) to attract new investments.
- Modified Special Incentive Package Scheme (M-SIPS): An older scheme (applications closed on July 27, 2020) that offered a capital subsidy (20% for SEZ and 25% for non-SEZ investments) and reimbursement of central taxes and duties for investments in the ESDM sector. Projects approved under this scheme continue to receive incentives.
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