Premium

Centre gets Rs 1.15 lakh crore in investment commitment from electronics parts makers

This incentive scheme differs from the government’s earlier production linked incentive (PLI) scheme for electronics manufacturing in how participating companies can avail subsidies.

Incentives have been linked to three key parameters: annual employment generation, capital expenditure needs and annual production.

The Centre’s ambitious Rs 23,000-crore electronics components manufacturing scheme has received 249 applications, with investment commitments totalling over Rs 1.15 lakh crore, as it looks to fast-track incentives for increasing value addition in the country’s burgeoning electronics sector.

The scheme, approved by the Union Cabinet in March with an outlay of Rs 22,919 crore over six years, was expected to generate production of Rs 4.56 lakh crore and bring in incremental investment of Rs 59,350 crore.

“Against a production target of Rs 4,56,500 crore, we have received production estimates more than Rs 10,34,000 crore” over the scheme’s six year tenure, IT Minister Ashwini Vaishnaw told reporters Thursday. “For employment we have targeted 91,600 persons, but here the employment which is expected is one and a half times more at 1,41,000 persons.”

Story continues below this ad

The government is currently scrutinising the 249 applications — 60% of which have come from medium and small enterprises as per Vaishnaw — and will soon fast track approvals, though the minister did not offer a concrete timeline for it. He declined to reveal the names of the applicants due to the vetting process.

The components that the government is looking to target through the scheme include display modules, sub assembly camera modules, printed circuit board assemblies, lithium cell enclosures, resistors, capacitors, and ferrites, among others. These are used in gadgets like smartphones and laptops, and appliances like microwave ovens, refrigerators and toasters, among others.

This incentive scheme differs from the government’s earlier production linked incentive (PLI) scheme for electronics manufacturing in how participating companies can avail subsidies. Incentives have been linked to three key parameters: annual employment generation, capital expenditure needs and annual production.

The components incentive scheme is a crucial next step as the PLI scheme for smartphone manufacturing is nearing its sunset. Despite getting companies like Apple and Samsung to localise some of their overall assembly in India, the domestic value addition has been relatively low — around 15-20% — with the government hoping to raise it to at least 30-40 per cent.

Story continues below this ad

Alongside the incentive scheme for semiconductors, the government has now launched support for practically all layers of electronics manufacturing, making the sector a crucial growth driver for the Indian economy. China, which has had a decisive lead in the electronics components sector for several decades now, has a domestic value addition of around 38 per cent.

Soumyarendra Barik

Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers’ rights, privacy, India’s prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More