Large Scale Electronic Manufacturing in India
With growing demand for electronics hardware, India needs to focus on manufacturing locally for many reasons including sustaining its economic growth, providing large scale employment and reducing foreign exchange outgo.
The National Policy on Electronics, 2019 (NPE 2019) vision is to position India as a global hub for Electronics Systems 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.
The recent Production Linked Incentive Scheme for Large Scale Electronics Manufacturing dated 1st April 2020 (PLI Scheme) seeks to provide fiscal incentives to boost domestic manufacturing and attract large scale investments in electronics value chain including electronic components and semiconductor packaging at a crucial juncture when India is actively seeking to gain from strained US-China relations by attracting investment.
With incentive under PLI Scheme being applicable to goods of specified target segment manufactured in India, eligibility criteria being linked to investment and sales, both incremental over Base Year, tenure being limited to 5 years subsequent to the Base Year, application to be made for a period of 4 months initially (may be extended) and future looking increasing uncertain due to Covid-19 caused mayhem, the success of PLI Scheme, though crucial, remains to be seen.
In the unprecedented crisis situation today, it is an absolute must to preserve and promote entrepreneurial spirit and prevent capital formation from becoming a casualty. It is crucial that firm innovative measures be taken which are unambiguous, widely publicised, promptly executed, successfully delivered and amended on need basis by adopting a flexible approach.
Other highlights:
- Application can be made by any company registered in India
- Scheme shall be open for applications for a period of 4 months initially (may be extended).
- Incentives will be applicable from 1st August 2020
- The tenure for support is 5 years subsequent to Base Year (financial year 2019-20).
- For applications received post the initial application period, applicants shall only be eligible for incentives for the remainder of tenure
- Eligibility under it shall not affect eligibility under any other scheme or vice versa.
- Incentive per company is applicable on incremental sale of manufactured goods (as distinct from traded goods) over base year subject to ceiling as decided by the Empowered Committee.
Rajesh Lal
Chartered Accountant
☎: +91-9971033977
✉: rajeshlal@rajeshlalandco.com
LinkedIn: https://in.linkedin.com/in/rajesh-lal
