{"id":45376,"date":"2025-03-17T07:48:49","date_gmt":"2025-03-17T02:18:49","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=45376"},"modified":"2025-05-06T19:40:56","modified_gmt":"2025-05-06T14:10:56","slug":"indias-23000-cr-incentive-policy-for-electronic-components-manufacturing","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-23000-cr-incentive-policy-for-electronic-components-manufacturing\/","title":{"rendered":"India\u2019s \u20b923,000 Cr Incentive Policy for Electronic Components Manufacturing Explained"},"content":{"rendered":"<h2>What\u2019s in Today\u2019s Article?<\/h2>\n<ul>\n<li>Incentive Policy for Electronic Components Manufacturing Latest News<\/li>\n<li>Electronics Component Manufacturing Sector in India<\/li>\n<li>India\u2019s \u20b923,000 Crore Incentive Scheme for Electronic Components Manufacturing<\/li>\n<li>Incentive Policy for Electronic Components Manufacturing FAQs<\/li>\n<\/ul>\n<h2>Incentive Policy for Electronic Components Manufacturing Latest News<\/h2>\n<ul>\n<li>The IT Ministry has finalized a \u20b923,000 crore incentive policy for electronic components manufacturing over six years.\u00a0<\/li>\n<li>This initiative aims to enhance domestic value addition, following the successful localization of smartphone assembly in India.<\/li>\n<\/ul>\n<h2>Electronics Component Manufacturing Sector in India<\/h2>\n<ul>\n<li>India\u2019s Electronic Components Manufacturing sector is growing rapidly with strong government support and strategic initiatives to make the country a global electronics hub.\u00a0<\/li>\n<\/ul>\n<h3>Market Size<\/h3>\n<ul>\n<li>Valued at $101 billion in March 2023, the sector aims to reach $300 billion by 2025-26.\u00a0<\/li>\n<li><strong>Production Linked Incentive (PLI) schemes<\/strong> have boosted production and attracted major global players like Apple and Samsung.\u00a0<\/li>\n<li>Exports of electronic goods rose by 23.6% in FY 2023\u201324 to $29.12 billion.<\/li>\n<\/ul>\n<h3>Key Initiatives<\/h3>\n<ul>\n<li>Key initiatives by MeitY, includes <strong>Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)<\/strong> and the <strong>Modified Electronics Manufacturing Clusters (EMC 2.0)<\/strong> scheme.<\/li>\n<li>These schemes focus on infrastructure and investment in high-value components.<\/li>\n<li>The National Policy on Electronics 2019, along with Make in India and Digital India, supports domestic manufacturing, job creation, and technological growth.\u00a0<\/li>\n<li>Investments in R&amp;D and manufacturing clusters further enhance the sector\u2019s expansion.<\/li>\n<\/ul>\n<h3>Future Prospects<\/h3>\n<ul>\n<li>With rising domestic demand due to digitalization and urbanization, the sector plays a vital role in economic growth and global supply chain integration.\u00a0<\/li>\n<li>The government\u2019s comprehensive approach highlights its strategic importance in achieving India&#8217;s long-term economic and technological goals.<\/li>\n<\/ul>\n<h2>India\u2019s \u20b923,000 Crore Incentive Scheme for Electronic Components Manufacturing<\/h2>\n<ul>\n<li>The IT Ministry has finalized an incentive policy worth \u20b922,919 crore over six years to boost electronic components manufacturing and deepen domestic value addition.\u00a0<\/li>\n<li>The scheme follows the success of the Production Linked Incentive (PLI) scheme for smartphone assembly but aims to address the low domestic value addition of 15-20%, targeting an increase to 30-40%.<\/li>\n<\/ul>\n<h3>Targeted Components<\/h3>\n<ul>\n<li>The scheme will support the manufacturing of key electronic components such as:\n<ul>\n<li>Display modules<\/li>\n<li>Camera sub-assemblies<\/li>\n<li>Printed circuit board assemblies<\/li>\n<li>Lithium cell enclosures<\/li>\n<li>Resistors, capacitors, ferrites, and more<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>Employment Generation<\/h3>\n<ul>\n<li>The initiative aims to create 91,600 direct jobs over six years.\u00a0<\/li>\n<li>Annual incentive payouts will range from \u20b92,300 crore to \u20b94,200 crore, conditional on companies meeting investment, production, and employment targets.<\/li>\n<\/ul>\n<h3>Types of Incentives<\/h3>\n<ul>\n<li>The scheme offers three types of incentives:\n<ul>\n<li><strong>Operational Incentives<\/strong> \u2013 Based on net incremental sales, similar to PLI schemes.<\/li>\n<li><strong>Capital Expenditure (Capex) Incentives<\/strong> \u2013 Based on eligible capital investments.<\/li>\n<li><strong>Hybrid Model<\/strong> \u2013 A combination of both operational and capex incentives.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>Investment Eligibility<\/h3>\n<ul>\n<li>Both greenfield (new projects) and brownfield (existing projects) investments are eligible.\u00a0<\/li>\n<li>Foreign companies can participate by either transferring technology to an Indian company or forming joint ventures with domestic firms.<\/li>\n<\/ul>\n<h3>Demand-Supply Gap in Electronic Components<\/h3>\n<ul>\n<li>A government assessment identified a $100 billion domestic demand-supply gap, which increases to $140 billion with exports.\u00a0<\/li>\n<li>India&#8217;s current production capacity is only $10.75 billion, covering just 10% of total electronics production.<\/li>\n<\/ul>\n<h3>Challenges in Domestic Manufacturing<\/h3>\n<ul>\n<li><strong>Lack of Scale<\/strong> \u2013 India\u2019s electronic components sector lacks large-scale domestic production.<\/li>\n<li><strong>High Investment to Turnover Ratio<\/strong> \u2013 Unlike smartphones, where \u20b91 investment yields \u20b920, in components, it only yields \u20b92-4.<\/li>\n<li><strong>High Import Dependence<\/strong> \u2013 Electronics imports account for <strong>75%<\/strong> of total electronics production, making it the second-largest import category after oil.<\/li>\n<\/ul>\n<h3>Future Projections and Urgency<\/h3>\n<ul>\n<li>Component demand is expected to reach $160 billion by 2028-29.<\/li>\n<li>Imports of key components grew from $29 billion in FY21 to $46.5 billion in FY23<strong>.<\/strong><\/li>\n<li>To meet demand, domestic component production with exports must grow at a CAGR of over 53%.<\/li>\n<\/ul>\n<h3>Conclusion<\/h3>\n<ul>\n<li>The government\u2019s incentive scheme is a crucial step to reduce import dependence, scale up domestic manufacturing, and integrate India into the global supply chain.\u00a0<\/li>\n<li>By addressing infrastructure, investment challenges, and skill development, the initiative aims to establish India as a key player in electronic components manufacturing.<\/li>\n<\/ul>\n<h2>Incentive Policy for Electronic Components Manufacturing FAQs<\/h2>\n<p><strong>Q1.<\/strong> What is India\u2019s \u20b923,000 crore incentive policy for electronic components?<\/p>\n<p><strong>Ans.<\/strong> It\u2019s a government scheme to boost domestic electronic components manufacturing and reduce dependence on imports.<\/p>\n<p><strong>Q2.<\/strong> What components are covered under the incentive scheme?<\/p>\n<p><strong>Ans. <\/strong>Key components include display modules, camera sub-assemblies, PCB assemblies, lithium cell enclosures, and resistors.<\/p>\n<p><strong>Q3.<\/strong> How does the incentive scheme benefit manufacturers?<\/p>\n<p><strong>Ans. <\/strong>It offers operational and capital expenditure incentives, encouraging both new and existing manufacturers to expand production.<\/p>\n<p><strong>Q4.<\/strong> Why is domestic electronic components manufacturing crucial?<\/p>\n<p><strong>Ans.<\/strong> India has a $100 billion demand-supply gap, making local production essential for economic growth and supply chain integration.<\/p>\n<p><strong>Q5.<\/strong> How will this scheme impact employment?<\/p>\n<p><strong>Ans. <\/strong>The policy aims to create 91,600 direct jobs over six years by attracting investments in high-value electronic components.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/economy\/in-it-policy-pipeline-rs-23k-crore-electronic-subsidy-scheme-for-value-add-and-jobs-9889778\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> | <a href=\"https:\/\/www.investindia.gov.in\/sector\/electronic-components-materials\" target=\"_blank\" rel=\"nofollow noopener\">II<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn about India\u2019s \u20b923,000 crore incentive policy to boost electronic components manufacturing, reduce imports, and generate jobs.<\/p>\n","protected":false},"author":5,"featured_media":45377,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-45376","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/45376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=45376"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/45376\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/45377"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=45376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=45376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=45376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}