Reasons to Invest

Growing Demand, Production, and Exports: The electronic components market in India (excluding imported PCB-Assemblies) grew by ~33% CAGR over the last 4 years and was valued at $20.8 bn in 2018-19. The domestic production for electronic components stood at $9.9 bn in 2018-19 of which $2.2 bn was exported.
Innovation and Design: India is a global R&D hub and the third largest start-up ecosystem in the world. India is home to 1140+ R&D Centres of Global MNCs employing 900,000+ professionals.
Low Cost of Manufacturing and EoDB: India is the preferred investment destination for electronics manufacturing given the low of manufacturing combined with the rapid transformation in ease of doing business

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Research Content Provider

Location Analysis

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Stakeholders Meeting

Issue Resolution

Regulatory Clearance Facilitation

FDI Norms

100% FDI is allowed under the automatic route. Under Defence electronics, FDI up to 49% is allowed under automatic route and beyond 49% through government approval.
100%

FDI Allowed under Automatic route

Did you Know?
  • India received FDI inflows of $71.05 bn in Computer Software and Hardware from April 2000 to March 2021.
  • India received FDI inflows of $37.66 bn in Telecommunications from April 2000 to March 2021.

Government Support

National Policy on Electronics, 2019 (NPE 2019)

The National Policy on Electronics is a policy roadmap that has been created to position India as a global hub of Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components including chipsets, and creating an enabling environment for the industry to compete globally.
In order to position India as a global hub for ESDM and push further the vision of the National Policy on Electronics (NPE) 2019, the following three schemes were notified on April 1st, 2020.
 

Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing

Seeks to boost large-scale domestic manufacturing by offering an incentive of 4-6% on incremental sales over a period of 5 years for mobile phones and specified electronic components.

A microsite containing more information on this scheme can be found here.

Production Linked Incentive Scheme (PLI) for IT Hardware

Offers an incentive of 2-4% on incremental sales over a period of 4 years for manufacturing of Laptops, Tablets, All-in-one PCs, and Servers.

A microsite containing more information on this scheme can be found here.

Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)

Incentives of 25% is offered on capital expenditure pertaining to plant & machinery, associated utilities, and technologies on a reimbursement basis.

A microsite containing more information on this scheme can be found here - https://www.investindia.gov.in/schemes-for-electronics-manufacturing

Modified Electronics Manufacturing Clusters Scheme (EMC 2.0)

Incentives of 50% of project cost (subject to ceilings) offered to enable the setting up of world-class electronics infrastructure.

A microsite containing more information on this scheme can be found here - https://www.investindia.gov.in/schemes-for-electronics-manufacturing

Phased Manufacturing Programme (PMP)

Roadmap for tariff rationalization to promote depth in manufacturing.

Public Procurement Order (PPO), 2017

PPO 2017 has been notified to encourage ‘Make In India’ and promote manufacturing and production of goods and services in India with a view to enhancing income and employment.

Electronics Development Fund (EDF)

“Fund of funds” to promote innovation, IP creation, Research & Development (R&D) and commercialization.

Major Investors

Product Profiles

The domestic market for Capacitors stood at $1.01 Bn of which $0.48 Bn was catered by domestic production. Exports were valued at $0.14 Bn.
The domestic market for Resistors stood at $0.37 Bn of which $0.12 Bn was catered by domestic production. Exports were valued at $0.04 Bn.
All figures shown are for 2018-19

Team Articles

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Understanding the Semiconductor Value Chain  India has…

FAQ

FAQs

What are the steps taken by Department of Electronics and Information Technology (DeitY) to support the growth of the sector?

The steps taken are as follows:
a) Infrastructure support: The Department has set up Information Technology Investment Regions (ITIRs). These regions are supported equipped with excellent infrastructure.
b) R&D promotion: 150% of expenditure incurred on in-house R&D is also available under the Income Tax Act.
In addition to the existing scheme for funding R&D projects, the department has put in place the 2 key schemes:
i) Support International Patent Protection in Electronics & IT (SIP-EIT).
ii) Multiplier Grants Scheme (MGS).
c) Tax incentives: Over the years, the Government has been taking steps to bring down the total taxation level on electronics hardware.

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What are the steps taken by Department of Electronics and Information Technology (DeitY) to support the growth of the sector?

The steps taken are as follows:
a) Infrastructure support: The Department has set up Information Technology Investment Regions (ITIRs). These regions are supported equipped with excellent infrastructure.
b) R&D promotion: 150% of expenditure incurred on in-house R&D is also available under the Income Tax Act.
In addition to the existing scheme for funding R&D projects, the department has put in place the 2 key schemes:
i) Support International Patent Protection in Electronics & IT (SIP-EIT).
ii) Multiplier Grants Scheme (MGS).
c) Tax incentives: Over the years, the Government has been taking steps to bring down the total taxation level on electronics hardware.

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Who is an Applicant under the PLI Scheme for Electronics Manufacturing?

Applicant for the purpose of the Scheme is a company registered in India, proposing to manufacture goods covered under Target Segments in India, and making an application for seeking approval under the Scheme. The applicant can operate new or existing manufacturing facility(ies) to manufacture goods covered under the Target Segments (i.e. mobile phones and specified electronic components). The aforesaid manufacturing can be carried out at one or more locations in India.

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What are the Qualification Criteria under PLI Scheme?

Qualification Criteria for applicants under different Target Segments in the Scheme are as defined:

  • For category Mobile Phones (Invoice Value INR 15,000 and above); Consolidated Global Manufacturing Revenue of the applicant (including its Group Companies), in the target segment, should be more than INR 10,000 Crore in the base year.
  • For category Mobile Phones (Domestic Companies); Consolidated Global Manufacturing Revenue of the applicant (including its Group Companies), in the target segment, should be more than INR 100 Crore in the base year. Applicants under this category can only be Domestic Companies as defined in Para 2.25 of the Scheme Guidelines
  • For Specified Electronic Components: Consolidated Global Manufacturing Revenue of the applicant (including its Group Companies), in the target segment, should be more than INR 50 Crore in the base year

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How will the consolidated global manufacturing revenue of the applicant (including its Group Companies), in the Target Segment, be calculated if same group company is claimed and considered for two or more applicant companies?

In case the manufacturing revenue, in the target segment, of an entity (group company) is claimed and considered for two or more applicant companies, the manufacturing revenue of such entity in the target segment will be equally divided among the applicants that are claiming revenue of such entity. Only such share of manufacturing revenue in the target segment, that is obtained after division of manufacturing revenue of that entity (group company), will be considered for determining qualification for such applicant under the scheme.

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