The government has unveiled three major schemes to boost electronics manufacturing in the country. This includes Production Linked Incentive Scheme (PLI) for large-scale electronics manufacturing, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme, which were approved by the Union Cabinet in March 2020.

As per the government, these schemes are expected to attract substantial investments, increase production of mobile phones and their components to around Rs 10 trillion by 2025, and generate around 500,000 direct and 1.5 million indirect jobs.

As per the statement released, the PLI Scheme will extend an incentive of 4-6 per cent on incremental sales of goods manufactured in India and covered under the target segments to the eligible companies for five years subsequent to the base year.

On the other hand, the SPECS will provide financial incentive of 25 per cent on capital expenditure for the identified list of electronic goods, including electronic components, semiconductor, and display fabrication units, among others.

Meanwhile, the EMC 2.0 will provide support for the creation of world-class infrastructure along with common facilities and amenities, including ready built factory (RBF) sheds or plug and play facilities for attracting major global electronics manufacturers, along with their supply chains.

Through these schemes, the government aims to increase the domestic value addition for mobile phones by 35-40 per cent by 2025.

The three schemes would entail an outlay of about Rs 500 billion.

Commenting on the development, Nitin Kunkolienker, President-MAIT, said, “Today’s announcement by the government on the schemes to boost electronic manufacturing in India had been in the works for almost 2-3 months and we applaud this initiative which is officially active now. MAIT is delighted on the introduction of this policy, the formulation of which was deliberated aggressively with the stakeholders. The mobile manufacturing industry is very positive about the move and this scheme will help meet the targets under NPE 2019. This will certainly lead to companies moving their supply chains to India. To increase the job creation, component manufacturing needs to be moved too. This will not only spur manufacturing but will make India an export-led global manufacturing hub for mobile phones.

“Also, it is imperative that the government bring the major electronics ecosystem on board through these schemes. The interruption in the global supply chain due to the pandemic gives India an opportunity to increase export-led manufacturing and broadening the scope of PLI to all other major sectors of electronics such as Consumer electronics, ICT, CPE products, Computers, Medical Electronics etc. will be a game-changer,” added Kunkolienker.