On Monday, Union Minister of Electronics Information Technology Ravi Shankar Prasad, announced that India has become the second-largest manufacturer of mobile phones in the world. In order to attract local electronic companies, the Centre on Tuesday asked for applications from electronics manufacturers that would be interested in availing benefits from a set of incentive schemes with a total worth of Rs 50,000 crore.
As announced earlier in March this year, the government has come up with three incentive schemes to attract mobile phone manufacturers around the world and to promote local electronic manufacturing.
The three schemes are as follows:
Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), Modified Electronics Manufacturing Clusters (EMC 2.0), and a production linked incentive (PLI) scheme for large scale manufacturing.
“There is a total incentive of Rs 50,000 crore. There are 5-6 large companies that control 80% of the global mobile market. Initially, we will pick up five global champions who under the PLI scheme shall be permitted to participate. We will also promote 5 Indian companies to become national champions,” IT and Telecom Minister Ravi Shankar Prasad said.
“The schemes have been opened today and companies can now submit their application,” Electronics and IT secretary Ajay Prakash Sawhney said. As part of the PLI Scheme, the Centre will offer 4-6% of incentive on incremental sales on a year-on-year basis. If handset manufacturers are able to scale-up production to the worth of Rs 1,5 lakh crores, then industry estimates forecast, that they have the ability to receive an incentive worth Rs 7,500 crore.
The SPECS will offer companies a 25% incentive on capital expenditure to manufacturers. The government has set an investment range of Rs 5 crore to Rs 1,000 crore for entities willing to set-up component plants under the scheme. Under EMC 2.0, eligible local electronic companies will get an incentive of 50% of the project with a limit of Rs 70 crore per 100 acres.
