On Tuesday, India introduced a US$6.65 billion plan to boost electronics manufacturing, denoting it would begin by offering five global Smartphone companies support to build up or increase domestic production.
To help the domestic production simultaneously with attractive investments in manufacturing of electronic components, the Union Ministry endorsed three plans; Production Incentive Scheme (PLI) for Large Scale Electronics Manufacturing, monetary help to the Modified Electronics Manufacturing Clusters (EMC2.0), and budgetary incentive of 25 percent of capital expense for the manufacturing of merchandise.
Kamal Nandi, President-CEAMA and Business Head and EVP Godrej Appliances stated, “We welcome the new plans presented by the Union Cabinet. In these dire times where the business is experiencing an intense loss, the measures taken by the legislature will assist in boosting domestic production and pull in enormous interests in the electronic sector.
Manish Sharma, President and (CEO) of Panasonic India stated, right now, the electronics business is one of the fastest developing sectors, anticipated to reach $400 billion by 2025 with potential import chance of $150 billion, which can be utilized locally.
Minister Ravi Shankar Prasad had asserted that the administration seeks to make cell phones as the largest exported item from India in the future.
Today the government also announced that now companies can begin applying for these schemes. Right now, cell phone makers import components from abroad and assemble devices here.
Schemes for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) presented in April 2020, aims at boosting 25% of capital expenditure for the manufacturing of goods that structures the supply chain of electronic products.
According to AIM reports, the world has been relying upon Asian regions like China and its neighboring state Taiwan for a majority of electronic hardware. However, with the outbreak of the Covid-19 pandemic, the supply chains have been compelled, and numerous countries are stressed over the absence of the making of electronic chips. The U.S. also has been thinking about setting up its own factories and moving away from its dependency on electronics from Asia.
The newly launched Schemes aim to grow domestic manufacturing and help balance the supply chain in India. There are different classes of goods qualified for an incentive under SPECS, extending from a Minimum Investment Threshold Limit of INR 5 crore to Minimum Investment Threshold of INR 1000 crore, plus Semiconductor Integrated Chips (ICs) and semiconductor wafers.
Currently, practically all the semiconductor demand is fulfilled by imports from countries like the USA, Japan, and Taiwan. The names of the five companies, which will be eligible, are awaited to be announced within the next two months. However, with the $6.65 billion will help bring a change in the progress of the Indian electronics sector in the coming years.
Article Credit: Reuters/ Business Today/ AIM/ Channel News Asia/ Business Standard/ Live Mint
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