To entice manufacturers of high-tech IT and mobile phone components to locate in India, the government is developing plans for a Rs 10,000–12,000 crore production-linked incentive scheme. The announcement comes as a current program to encourage the production of semiconductors and electronic components, introduced in 2020, is scheduled to expire in March 2023. With an estimated budget of between Rs 10,000 and Rs 12,000 crore, the Ministry of Electronics and IT (MeitY) is developing an incentive program to encourage the domestic production of high-end components for items like cell phones, servers, and personal computers. According to officials familiar with the plan’s specifics, the goal of the components incentive program is to create a fully functional ecosystem for electronics production in India. According to analysts, the action could further entice multinational corporations like Apple to expand local operations. An official who wished to remain anonymous said, “The final details of the scheme are still being worked out, but we are aiming to come out (with it) by the following financial year.”
Termination of Old Scheme:
The components incentive program is particularly crucial because the current SPECS, which has a budget of Rs 3,285 crore and was created to promote the production of electronic components and semiconductors, will expire in March 2023.
By 2026, the government wants to see $300 billion in electronics production, with $18 billion of that amount perhaps going toward components. As India’s electronics system design and manufacturing sector still trails behind nations like Vietnam in areas like the cost of financing, logistics, and power, the industry claims it will require ongoing government support. This year, a number of top-level executives left their organizations, and some have yet to accept new positions, as startups and tech companies began to restructure their businesses in the face of an unstable funding climate.