The Ministry of Electronics and IT (MEITY) on the dawn of Tuesday announced that they are working on a PLI scheme with an outlay of around Rs12000 cr to promote the manufacturing of High-end components which can be used in smartphones, servers, and personal computers
The 12000 cr PLI scheme has been done with the objective to develop an all-around ecosystem of electronics manufacturing in India. The move may further help to attract global IT giants to relocate their manufacturing.
An official close to this plan has said that “The scheme may offer incentives on the production of components as well as provide capital support for setting up production facilities. The final contours of the scheme are still to be finalized but we are aiming to come out with this policy by next financial year”
This PLI scheme shall be providing necessary assistance to companies located in countries such as Taiwan, Japan,South Korea to relocate their production units to India
The components incentive scheme gains even more significance as the existing scheme for manufacturing electronic components and semiconductors(SPECS) comes to an end by march 2023.Specs was launched alongside the Rs41000 cr Production Linked Incentive plan for smartphones in April 2020 for a period of three years. Specs has an outlay of Rs3285 cr
SPECS was made for the purpose to promote the manufacturing of high-value-added items such as electronic components such as cameras modules, vibrator motors, display panels, etc. the scheme led to an investment of around 12000 cr as shown in data by the Indian Cellular and Electronics Association(ICEA). The scheme served its purpose however the industry is demanding that this scheme should be extended for a period of 5 years and the amount should be increased to Rs 10000 cr to support further component manufacturing.
By 2026, The Government is planning electronics manufacturing worth $3oo billion, of which $18 billion could be for components. According to the industry, the govt shall continue to support the companies because the indian electronics system design and manufacturing sector are still 10-14% less competitive than that of other global manufacturing economies such as vietnam due to the high cost of financing, logistics and power. The officials have said that the government is aware that in order to develop a successful ecosystem for electronics manufacturing it needs to develop the components locally.
The Indian government has been aggressive in increasing the share of manufacturing in the GDP. it may increase