Electronics incentive schemes

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Subject: Schemes

Context:

Government has announced three schemes for promotion of electronics manufacturing in India.

Concept:

  • Production Linked Incentive Scheme (PLI)for Large Scale Electronics Manufacturing shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under the target segments, to eligible companies, for a period of five years subsequent to the base year
  • Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) shall provide financial incentive of 25% on capital expenditure for the identified list of electronic goods,e., electronic components, semiconductor/ display fabrication units, Assembly, Test, Marking and Packaging (ATMP) units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods
  • Modified Electronics Manufacturing Clusters (EMC 2.0)Scheme shall provide support for 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.

Background

  • India’s production of electronics grew from USD 29 billion in 2014 to USD 70 billion in 2019.
  • The growth in mobile phone manufacturing in particular has been remarkable during this period. From just 2 mobile phone factories in 2014, India now has become the 2nd largest mobile phone producer in the world.
  • India’s share in global electronics production has reached 3% in 2018 from just 1.3% in 2012.