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Union govt unveils three schemes worth Rs 50,000 crore to make India self-reliant in electronics manufacturing

The Union Minister also said the government will pick up "five global champions" who will be permitted to participate under the PLI scheme. Five Indian companies will also be added in the scheme.

To give a fillip to the electronics manufacturing sector in the country, the Modi government on Tuesday urged the firms to apply for schemes to promote electronic manufacturing in India to help them become global champions.

The Ministry of Electronics & IT government had announced three schemes in April – Production linked Incentive (PLI), component manufacturing schemes (SPECS) and cluster schemes (EMC 2.0) in an aim to increase electronics manufacturing rapidly by 2025 and create additional 1.5-2 million new jobs in the short term.

Reiterating the same, the Union IT minister Ravi Shankar Prasad released detailed guidelines about the three new initiatives of the government and asked companies to start applying for the schemes to avail the benefit.

The total value announced today stands at Rs 50,000 crore with the goal of increasing production to $106 billion from $70 billion in 2018-19. The target for exports of electronic components is $77 billion.

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The Union Minister also said the government will pick up “five global champions” who will be permitted to participate under the PLI scheme. Five Indian companies will also be added in the scheme.

Three schemes to boost electronics manufacturing in the country

Under the Production linked Incentive scheme, the government will provide an incentive of 4-6 per cent on incremental sales of goods manufactured in the country up to 2025. The PLI scheme takes the largest portion of the benefits, standing at approximately Rs 40,000 crore and is expected to help large scale manufacturing of mobile and other gadgets.

The second scheme – Scheme for Promotion of Manufacturing of Components and Semiconductors (SPECS), is aimed at promoting component manufacturing in India. The scheme intends to reduce imports of electronic components, which the industry currently undertakes to assemble products here. The government will provide a financial incentive of 25% on capital expenditure for a list of electronic goods, which include electronic components, semiconductor/ display fabrication units, Assembly, Test, Marking and Packaging (ATMP) units, specialized sub-assemblies and capital goods for manufacture of these products. 

The scheme will remain open for three years for investors to apply and for five years for investments. The outlay for the scheme amounts to Rs 3,285 crore.

Lastly, the Electronics Manufacturing Cluster Scheme (EMC 2.0) project will provide land for large manufacturing clusters, and other infrastructure requirements. The scheme is a modified version of the earlier EMC scheme. The EMC 2.0 shall provide support for the creation of world-class infrastructure along with common facilities and amenities, including Ready Built Factory (RBF) sheds / Plug and Play facilities for attracting major global electronics manufacturers, along with their supply chains, the ministry statement says.

Focus on mobile manufacturing in India

The Union Minister Prasad also added that electronics manufacturing in the country was valued at Rs 1,90,366 crore in 2014, which has seen a rise to Rs 4,58,000 crore today, while its share in global manufacturing has risen to 3% in 2018 from 1.3% in 2012. The minister also added that th exports grew by 38% year-on-year between 2018 and 2019.

“India is now a second-biggest mobile manufacturing country in the world. From just 2 factories, we now have 200 manufacturing units,” added Prasad, the Union minister for electronics and IT.

The Modi government wants India to be a mobile manufacturing hub and intends to make the country to become the largest exported item from India and domestic value addition of 35-40% to mobile manufacturing by 2025.

The new scheme announced by the Modi government is meant to help mobile manufacturing in a big way. However, the government also want to boost other sectors like automobile electronics, medical electronics, strategic electronics like defence, which will have a bearing from the development of electronics manufacturing in the country.

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