The electronics industry representatives have reportedly urged the central government to allow investment proposals involving joint ventures with Chinese companies under the automatic route, provided the equity holding is restricted to a minority 26 per cent.
The recommendations submitted by several industry associations, including the Confederation of Indian Industry (CII) and the India Electronics and Semiconductor Association, noted that this clarity is essential for establishing advanced component manufacturing capabilities in India.
Further, the industry has conveyed to the government that a standardised framework for Chinese investments, instead of the current case-by-case approval process, would help unlock foreign direct investment into the electronics sector.
Meanwhile, officials from the Ministry of Electronics and Information Technology (MeitY) indicated that the government has received several applications from international companies for the Electronic Component Manufacturing Scheme (ECMS).
According to existing guidelines from the Department for Promotion of Industry and Internal Trade (DPIIT), foreign direct investment from neighbouring countries, effective from 2020, requires prior security clearance from both the Ministry of Home Affairs and the Ministry of External Affairs. Chinese firms are not part of any of the 24 investment proposals submitted by 21 companies that have been approved under the ECMS to date. MeitY is clearing ECMS applications in batches, and more approvals are expected shortly, officials added.
Representations from industry bodies have gained momentum after electronics company Dixon Technologies received the MeitY’s approval to establish a joint venture with its Chinese partner, Longcheer Intelligence Private Limited.
