PLI scheme aims to boost electronic goods export

PLI scheme aims to boost electronic goods export The government has announced the Production Linked Incentive Scheme (PLI) in April last year for Large Scale Electronics Manufacturing with an aim to boost exports and attract additional investment in electronics manufacturing which has received high interest from applicant companies and projected outcomes. "The PLI Scheme is designed to attract global champion companies into India and promote Indian champion companies in electronic manufacturing. Over the next five years, the scheme is expected to lead to a total production of about INR 10.5 lakh crore. The scheme is expected to boost exports significantly and of the total estimated production, more than 60% is expected to be contributed by exports. The scheme is also expected to bring in additional investment in electronics manufacturing to the tune of INR 11,000 crore. Value addition by the approved companies is expected to go up from 20-25% presently to 35-40% by 2025," according to a statement by the Ministry of Electronics and Information Technology in reply to a question in Lok Sabha. " The scheme has been a huge success in terms of the interest received from applicant companies and projected outcomes," it added. "The Scheme provides an incentive of 4% to 6% to eligible companies on incremental sales (over base year) involved in mobile phone manufacturing and manufacturing of specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units," it added further. Some of the other measures taken by the Government to promote electronics hardware manufacturing, including setting up of mobile phone manufacturing factories in the country are: 1) Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) was notified on April 01, 2020 which provides a financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise the downstream value chain of electronic products, i.e., electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods. 2) 100% FDI: As per extant Foreign Direct Investment (FDI) policy, FDI up-to 100% under the automatic route is permitted for electronics manufacturing (except from countries sharing land border with India), subject to applicable laws/ regulations; security and other conditions. 3) Electronics Manufacturing Clusters (EMC) Scheme: Electronics Manufacturing Clusters Scheme was notified on 22nd October, 2012 to provide support for the creation of world-class infrastructure along with common facilities and amenities for attracting investment. Under the Scheme, 19 Greenfield EMCs and 3 Common Facility Centres (CFCs) measuring an area of 3,464 acres with total project cost of INR 3,743 crore including Government Grant-in-Aid of INR 1,527 crore have been approved. 4) Tariff Structure has been rationalized to promote domestic manufacturing of electronic goods, including, inter-alia, Cellular mobile phones, Televisions, Electronic components, Set-Top Boxes for TV, LED products and Medical electronics equipment. 5) Exemption from Basic Customs Duty on capital goods: Notified capital goods for manufacture of specified electronic goods are permitted for import at “NIL” Basic Customs Duty.

Electronics