Govt starts inviting application for Rs 50k cr electronic incentive schemes

The government on Tuesday started inviting applications for Rs 50,000 crore incentive schemes to attract global mobile device makers and boost local companies for electronics manufacturing. IT and Telecom Minister Ravi Shankar Prasad said India will initially aim to attract top 5 global mobile manufacturing companies and also promote five local firms that will be identified through a screening process.

"There is a total incentive of Rs 50,000 crore. There are 5-6 large companies that control 80 per cent of the global mobile market. Initially, we will pick up five global champions who under the PLI scheme shall be permitted to participate. "Global and the local will together to make India a good manufacturing talented country supporting the global chain. We will also promote 5 Indian companies to become national champions," Prasad said.

Global mobile phone companies with at least Rs 10,000 crore consolidated revenue in 2019-20 and selling handsets priced over Rs 15,000 a unit will be eligible for the PLI scheme, according to the guidelines issued by the government. However, domestic companies with minimum revenue of Rs 100 crore in 2019-20 can apply for the scheme and there is no cap on the price of handsets to be sold by them.

The minister said India has become the second largest mobile manufacturing country in the world, and is now working to lead the segment globally. "Self-reliant India is not an India of isolation or not an inward-looking country. It is an India that enhances its capacity and develops a strong ecosystem as well as a robust supply chain linked with the global economy. A self-reliant robust India is not against any country," Prasad said.

The government had notified three schemes on April 1 for the promotion of electronics manufacturing. These plans were Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), Modified Electronics Manufacturing Clusters (EMC 2.0), and and production linked incentive (PLI) for large scale manufacturing. The minister said the government is trying to create employment for 15 to 20 lakh people in the coming few years in the electronics manufacturing sector. "The schemes have been opened today and companies can now submit their application," Electronics and IT secretary Ajay Prakash Sawhney said.

The schemes are estimated to take mobile production to Rs 8 lakh crore in value terms and export worth Rs 5.98 lakh crore in next five years, he added. Niti Aayog CEO Amitabh Kant said global mobile majors will come to India in next 2-3 years, and the country will soon become number one in the segment.

"We have all worked as a team to make electronics and mobile phone manufacturing the number one sector of India. You will see results coming in the next 2-3 years. You will see all the top manufacturers coming to India, not only for India, but for the global markets," Kant said. The production of mobile mobile handsets in 2018-19 has reached 29 crore units worth Rs 1.70 Lakh crore from 6 crore units worth Rs 19,000 crore in 2014.

While the exports of electronics has increased from Rs 38,263 crore in 2014-15 to Rs 61,908 crore in 2018-19, India's share in global electronics production has reached 3 per cent in 2018 from 1.3 per cent in 2012. Under the PLI scheme, the government will offer 4-6 per cent incentive on incremental sale on a year-on-year basis. According to industry estimates, mobile manufacturing companies have the potential to get an incentive of around Rs 7,500 crore if they scale up production to worth about Rs 1.5 lakh crore over the next five years under the PLI scheme.

The government expects to generate manufacturing revenue potential of Rs 10 lakh crore. Under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), companies will get 25 per cent incentive on their capital expenditure. The government has set an investment range of Rs 5 crore to Rs 1,000 crore for companies willing to set-up electronic components plants under the scheme.

Under the EMC 2.0, the entities will get an incentive of 50 per cent of the project with a limit of Rs 70 crore per 100 acres..

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)