The demand of Electronics System Design and Manufacturing (ESDM) is estimated to grow exponentially to USD 400 Billion by 2023-24. The Government attaches high priority to electronics & IT hardware manufacturing. It has the potential to generate domestic wealth and employment, apart from enabling cyber-secure ecosystem. The electronic manufacturing sector requires continuous push with the overall objective of promoting “Make in India”, not only to meet the domestic demand but also to promote India as a hub for electronics manufacturing. Several policy initiatives under the “Digital India” and “Make in India” programmes are designed to facilitate investment, foster innovation, protect intellectual property, and build best in- class manufacturing infrastructure towards creating conducive environment for attracting investment in the electronics hardware manufacturing sector.
The intent of the Government is to ensure a level playing field for domestic manufactures to enable them to compete with imports in the sector by rationalization of tariff structure, simplification of procedures, providing incentives and upgrading infrastructure. As a result of various measures taken over the last few years, production of electronics hardware has shown significant increase. The demand of electronics hardware is increasingly being met by domestic production. The following initiatives have been taken in this regard –
Modified Special Incentive Package (M-SIPS):
In order to promote large scale manufacturing in the country, a Modified Special Incentive Package Scheme (M-SIPS) was announced by the Government in July 2012 to offset disability and attract investments in Electronics System Design and Manufacturing (ESDM) Industries. The scheme mainly provides subsidy for investments in capital expenditure- 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZS. The incentives are provided on reimbursement basis. The policy provides for an inter-ministerial Appraisal Committee to evaluate investment applications. Based on the recommendation of Appraisal Committee, approval of Competent Authority is obtained.
The Union Cabinet in its meeting held on 21st July 2015 has approved the extension of M-SIPS and also approved amendment of M-SIPS in order to simplify the procedure and enhancement of scope and the notification of amendment in M-SIPS (simplifying procedure, enhancement of scope and extension for 5 years) was issued on 3rd August, 2015. Further, the Union Cabinet in its meeting held on 18th January, 2017, approved certain amendments in the M-SIPS policy which were notified on 30th January, 2017. As per the aforesaid amendments, applications under the Scheme will be received till 31st December 2018 or till such time that the incentive commitment reaches `10,000 crore, whichever is earlier.
Incentives under the scheme will now be available for investments made within 5 years from the date of approval. These amendments are expected to expedite investments in electronic manufacturing. As per the directions of the Cabinet, a separate committee headed by Cabinet Secretary has been set up for mega projects, envisaging more than ` 6850 crore investments (investment above 1 billion USD).
The status of M-SIPS applications as on 28th February 2018: So far, total 322 applications, with investment amounting to `1,33,861 crore have been received under M-SIPS. Of which, 148 applications with investment of approximately `27,460 crore have been approved. 19 applications with investments of approximately `12,253 crore have been recommended by the Appraisal Committee for approval, 80 applications with investments of approximately `42,193 crore have been closed due to incomplete applications or not meeting the eligibility.