Incentive scheme for manufacturing of high end components

The Ministry of Electronics and IT (MeitY) is planning to launch an incentive scheme for fostering domestic manufacturing of high end electronics components, by next financial year. The government has indicated that it would be open to joint venture (JV) partnerships with Chinese firms for high tech components, which will enable global companies like Apple to further expand manufacturing in India.

India is planning to develop a complete ecosystem for electronic manufacturing in the country. The government may soon launch a Production Linked Incentive (PLI) scheme for ‘high-end’ components for electronic products like smartphones, servers and computers with an outlay of Rs 10,000-12,000 crore. With this government also aims to attract global players.

It is reported that government would be open to joint venture (JV) partnerships with Chinese firms for high tech components, which will enable global companies like Apple to further expand manufacturing in India. The incentive scheme for components will help companies located in other countries such as Taiwan, Japan and Korea to relocate or set up new units here in India. The scheme may offer incentives on production of components as well as capital support for setting up production facilities. However the final structure of the scheme is still to be finalised.

The government is targeting electronics manufacturing worth US$ 300 billion by 2026 of which US$ 18 billion could be for components. The launch of PLI scheme for components is important since the existing Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) will be ending in March 2023.

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Originally published in The Economic Times