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Value-add target in new PLI scheme for electronics manufacturing may double

June 19, 2024


In a move to deepen manufacturing in electronics in India, the Centre is targeting 35-40 per cent value-addition through the yet-to-be launched production-linked incentive (PLI) scheme for electronics components. This target implies doubling of value-addition from the current levels of 18-20 per cent in the case of electronics manufacturing through various incentive schemes. The target of achieving 40 per cent local value-addition is comparable to only China.

The scheme is one of the priorities on a list of around 30-plus items that the IT Ministry has submitted to the Government as part of its 100 days’ agenda. Semiconductor or chip manufacturing is also high on Meity’s to-do list. Apart from players, such as the Tata group and Micron, which are setting up their facilities for chip manufacturing, there are some pending applications that have to be processed. After that, a fresh round of funds will be raised for the next phase of the semiconductor mission.

For the electronics component scheme, the ministry is learnt to have already done a preliminary identification of the components. It will soon finalise a list of components to be covered under the scheme, after a few more rounds of consultation with stakeholders, including the industry. The new scheme would replace the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), which ended on March 31 after a one-year extension.

The scheme provided a financial incentive of 25 per cent of capital expenditure for a list of electronic goods that included electronic components, semiconductor, and display fabrication units, among others. In addition to SPECS, there are other PLI schemes for hardware and electronics manufacturing. According to the National Policy on Electronics (NPE), 2019, the Central Government has a goal of achieving $300 billion in revenues from electronics production by 2025-26, from the current figure of around $103 billion. Recently, the India Cellular & Electronics Association (ICEA), in a submission to Meity, asked the Government for a Rs 30,000-35,000 crore PLI scheme for components and sub-assemblies, along with capital expenditure support, to back the rising exports of mobile phones and other electronics. The proposed new scheme will replace the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).

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