New Delhi, NFAPost: The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductor (SPECS) has been extended by the Ministry of Electronics & Information Technology by a year.
The vision of National Policy on Electronics 2019 (NPE 2019) is to position India as a global hub for 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.
The development of supply chain is essential for the manufacturing of electronic products with higher domestic value addition.
Electronic components are the basic building blocks for Electronics Industry and entail maximum value addition. Therefore, a vibrant electronic components manufacturing ecosystem is vital for the overall long-term and sustainable growth of electronics manufacturing in India and essential to achieve net positive Balance of Payments (BoP).
The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) notified vide Gazette Notification No.CG-DL-E-01042020-218992 dated April 01, 2020 will help offset the disability for domestic manufacturing of electronic components and semiconductors in order to strengthen the electronics manufacturing ecosystem in the country.
The scheme will provide financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products, i.e., electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods, all of which involve high value added manufacturing.
Commenting on the development, Arvian Research stated that to establish India as a global leader in electronics manufacturing, Government of India has launched many flagship schemes which are aimed at “Atmanirbhar Bharat – A self-reliant India” under the aegis of National Policy on Electronics 2019 (NPE 2019).
“The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) is a step in this direction. It was notified on April 01, 2020 and provides financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products, i.e., electronic components, semiconductor / display fabrication units, ATMP units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods,” states Arvian Research.
According to industry associations, the extension will encourage local electronics manufacturing and it is also aimed at allowing filing of new applications that was discontinued at the end of the fiscal year on March 31, 2023. On April 5, the scheme was extended through a notification.
India Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo said it is a boost for the whole Indian electronics ecosystem as the scheme has just been extended for a year.
“This is an interim arrangement to allow applications which were discontinued on March 31, 2023. Deliberations are also ongoing to reframe the scheme with additional capital outlay, amendments in notified items and investment threshold limits,” said India Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo
SPECS, he said, had a financial outlay of Rs 3,250 crore, which has not been completely used. Finances, though, are considered blocked or used once applications are approved.
“The extension will help applicants to get their projects approved swiftly…once the complete budget is exhausted with approvals, the scheme will stop,” he added.
In a recent statement the government has taken strategic steps and initiatives to expand the electronics manufacturing sector in the country and make India a global electronics manufacturing and design hub. As a result several proposals have been received from foreign investors under the following schemes:
Under the Modified Special Incentive Package Scheme (M-SIPS), a total of 127 proposals with proposed investment of Rs 59,086 crore from companies having foreign shareholding are under consideration for setting up of units for manufacturing of electronic goods/products. Out of these 127 proposals, 124 proposals with proposed investment of Rs 56,341 crore have been approved. The reported capital expenditure incurred by 104 approved applicants (out of the approved 124 applicants) for electronic equipment manufacturing is Rs. 19,600 crore.
Under the Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing notified on 1st April, 2020, a total of 12 applications from foreign companies have been approved.
Under the Production Linked Incentive Scheme (PLI) for IT Hardware notified on 03rd March, 2021, a total of 4 applications from foreign companies have been approved.
This information was given by the Minister of State for Electronics & Information Technology, Shri Rajeev Chandrasekhar in a written reply to a question in Rajya Sabha today.
