Electronics Component Manufacturing Scheme
The Ministry of Electronics and Information Technology announced a 6 year long ₹22,919 crore scheme to boost the manufacturing of electronics components. The scheme aims to enhance domestic capability in producing "passive" components by offering a mix of capex- and turnover-linked incentives.
Incentives Structure
- Incentives range from 1–10% for incremental investments and turnover, based on the year and type of component.
- Sub-assemblies like camera and display modules will receive 4–5% turnover-linked incentives, which will gradually decrease after the second year.
- Firms producing electro-mechanicals, multi-layer printed circuit boards, lithium-ion cells, and device enclosures will get 6–8% incentives initially, reducing to 3–5% by the scheme's end.
- Capital goods manufacturers and bare component producers benefit from a 25% capex incentive, requiring a minimum additional investment of ₹10 crore.
- Employment-linked incentives are set at 1% of turnover, deducted if employment targets are not met.
Objectives and Goals
- The scheme aims to increase the domestic value added in electronics manufacturing, which is currently at 18%, compared to China's 38%.
- The government targets doubling this percentage by 2030.
- By facilitating incentives, the scheme addresses the economic disadvantages of local manufacturing.
