Govt launches Electronics Mfg Scheme 2.0, aims to get 5 top global players

Also plans to promote five domestic companies on national scale

The Ministry of Electronics and Information Technology (MeitY) on Tuesday launched the Electronics Manufacturing Scheme 2.0, which includes three sub-schemes and has a combined outlay of Rs 50,000, to promote production, not just for the domestic market, but also for export.

The three schemes are 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.  The government invited applications from companies looking to invest in India under these schemes, as it plans to initially get the top five global mobile manufacturing companies, and promote five domestic companies on the national scale. 

“Globally, 5-6 firms control 80 per cent of the mobile market. We initially plan to pick up five global champions that will be permitted to participate under PLI. We also want to make national champions, so we will incentivise five Indian companies as well,” said Ravi Shankar Prasad, minister of electronics and IT.

These firms will, however, be selected in accordance with the guidelines. The deadline for accepting applications is August, the minister said. The government had announced the three schemes in March. 

Under the PLI Scheme, electronics manufacturers will be offered incentives of 4-6 per cent on their incremental sales of goods manufactured in India for a period of five years.

SPECS will provide financial incentive of 25 per cent on capital expenditure of some electronics goods and components specified by the government. EMC 2.0 will provide assistance to create infrastructure, along with facilities and amenities, including ready built factory sheds, and plug-and-play facilities for attracting major global manufacturers, along with their supply chains.

The manufacturing of mobile handsets, which has been a top priority of the government, was a focus area of the National Policy on Electronics 2019 with a target of producing 1 billion mobile handsets by 2025, valued at $190 billion, including 600 million mobile handsets for export.

“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. MAIT (Manufacturers Association for Information Technology) is delighted with the introduction of this policy,” said Nitin Kunkolienker, MAIT’s president. 

Prasad said India has emerged as the second largest mobile manufacturer in the world. “In 2014-15, value of mobile produced was Rs 18,992 crore with 6 crore (60 million) units. This increased to Rs 1.7 lakh crore (trillion) in value and 30 crore (300 million) in terms of units in 2018-19,” he said.

With the three new schemes,  the government aims to manufacture electronics worth Rs 8 trillion, while generating employment for about 1 million people in the next five years, according to a presentation made by IT Secretary Ajay Sawhney.

“The industry is very positive about the move and this scheme will help meet targets under NPE (National Policy on Electronics) 2019... 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, computers, medical electronics, etc, will be a game-changer,” said Kunkolienker.