GoI approves 10 PLI projects of Rs 10.5 trillion in electronics manufacturing sector

Published: October 7, 2020

On October 6, 2020, the Government of India approved 16 proposals under two flagship schemes (Make in India and Atma Nirbhar Bharat Abhiyan) in the electronics manufacturing sector. The projects are expected to bring Rs 11,000 crores of investments in the local electronics manufacturing sector. This in turn will increase the production in the sector to Rs 10.5 trillion in the next five years.

Highlights

According to the Central Government, the plan is to boost the exports of Electronics to Rs 6.5 trillion by 2025 under Production Linked Incentive Scheme. Around five proposals from private manufacturers such as Lava, Micromax, UTL Neolyncs, Padget Electronics and Optiemus Electronics were cleared. These five projects will manufacture Rs 1.25 trillion handsets in the next five years. Apart from these five firms, proposals of five other firms were also approved. These projects are to generate 200,000 direct and 600,000 indirect employment.

How will India be benefitted?

The step will attract several huge electronics giants such as Apple. Now Apple will consider higher volume production and exports from India. In fact, Apple is one among the 10 companies that received approval. This will help India become an alternate to China in electronics manufacturing and thereby making India an export hub. The Multi National Companies are currently finding an alternate to China due to COVID-19 pandemic.

Japan is offering high incentives to companies that are willing to shift their bases from China. The Japanese Government had allocated 23.5 billion USD in the 2020 Budget to encourage companies to disperse their manufacturing sites across ASEAN countries.

Production Linked Incentive Scheme

The scheme extends incentive of 4% to 6% to goods manufactured in India for five years starting from 2019-20. The scheme was notified under National Policy on Electronics. The companies that sell mobile phones for Rs 15,000 or more will get incentive of 6%. In the same category, the companies owned by Indian nationals has been kept at Rs 200 crores.

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