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Govt clears Rs.6,155cr proposals for electronics manufacturing

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Electronics manufacturingIn its bid to turn the country into an electronics manufacturing hub, the government has cleared proposals worth about Rs.6,155 crore.

The Department of Electronics and Information Technology (DeitY) approved the proposals under the Modified Special Incentive Package Scheme (M-SIPS).

The primary aim of the scheme is to provide financial incentives to companies for setting up electronics manufacturing units. As of now, the government has given approval to 28 electronics manufacturing clusters (EMCs) and common facility centres (CFCs) across the country.

According to a report by Deloitte Touche Tohmatsu released last year, the demand for electronics hardware in India is projected to grow $400 billion by 2020. However, by that time, the domestic production is estimated to rise to only $104 billion, while the rest has to be met through imports. However, through various means, the Government is looking at reducing the dependence on electronic imports by promoting domestic manufacturing.

The idea is to push more companies set up base in India to manufacture LED televisions, set-top boxes, automotive electronics, telecom equipment, RFID tags and labels among other things, a Ministry of Communications and Information Technology official said. “Most of the equipment till now are not made in India but only assembled. We hope that this would give a much needed push to the sector,” he added.

Even as the government has been pushing electronics hardware manufacturing in India through measures like 100 per cent FDI under automatic route, no requirement for industrial licence, payment of technical know-how fee and royalty for technology transfer under automatic route, the impact of such steps has not been much visible measures until now.

Lack of dependable power, high cost of finance, poor logistics and infrastructure, weak components manufacturing base are some of the factors holding back the growth of electronics in the country.

Under the M-SIPS programme DeitY received proposals from 14 states, including Goa, Gujarat, Haryana, Kerala, Madhya Pradesh, Telangana and Uttar Pradesh.

The states, which have been given final clearance, are Madhya Pradesh, Rajasthan, Jharkhand, West Bengal, Karnataka and Maharashtra.

The proposals received include manufacturing of RFID inlays and tags, automotive electronics, telecom equipment, instrument clusters, optical fibre cable, LED televisions, wifi dongles among other things.

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