Description

In a major push to enhance domestic production capabilities and reduce reliance on imports, the Ministry of Electronics and Information Technology (MeitY) has officially launched the Electronics Components Manufacturing Scheme. This move is aligned with India's broader vision of becoming a global manufacturing hub for electronics and fostering self-reliance in the sector.

Overview Of Scheme

This newly introduced scheme is the first dedicated Production-Linked Incentive (PLI) initiative tailored specifically for the manufacturing of passive electronic components. Unlike active components such as integrated circuits and semiconductors, which are addressed under the India Semiconductor Mission (ISM) this scheme targets components that are essential for a wide range of electronic devices.

The eligible components under the scheme include:

• Resistors

• Capacitors

• Microphones

• Speakers

• Relays

• Switches

• Connectors

• Special ceramics

By focusing on these elements, the scheme aims to fill a crucial gap in the electronics manufacturing ecosystem.

Incentive Structures Offered

To encourage both new and existing companies to invest in this segment, the scheme offers three distinct types of financial incentives:

• Turnover-Linked Incentive - Based on incremental revenue generated from the sale of eligible components. Designed to reward companies for actual market performance.

• Capex-Linked Incentive - Linked to capital expenditure on plant, machinery, and production facilities. Encourages long-term infrastructure development.

• Hybrid Model - Combines features of both turnover-linked and capex-linked incentives. Offers flexibility to firms depending on their investment and growth strategy.

Incentive rates will vary between 1% to 10%, depending on factors such as the specific year of production, the type of component, and the scale of investment and output.

Focus On Employment Generation

One of the standout features of the scheme is its mandatory employment generation criterion. All eligible applicants including both component manufacturers and capital equipment producers must demonstrate a commitment to creating skilled jobs. This ensures that the scheme not only accelerates manufacturing output but also contributes to human capital development and job creation within India.

Tenure And Timeline

• Total duration: 6 years

• Gestation period: 1 year (for setup and initial groundwork)

• Active implementation period: 5 years of incentives based on performance

Industries That Will Benefit

This scheme is expected to have a ripple effect across multiple industries, including:

• Automotive electronics

• Consumer electronics

• Telecommunications

• Industrial automation

• Medical devices

• Defence electronics

By localizing the supply of critical passive components, India can enhance the resilience of its electronics value chain, lower production costs, and attract global manufacturers seeking reliable alternatives to traditional supply bases.

Strategic Impact

This initiative complements other government efforts like Make in India, Digital India, and the PLI Scheme for IT Hardware and Semiconductors. Collectively, these programs are creating a robust ecosystem that supports innovation, manufacturing, exports, and employment.

The Electronics Components Manufacturing Scheme marks a significant step forward in India’s journey to becoming a globally competitive electronics manufacturing powerhouse, with an emphasis on sustainability, economic growth, and technological leadership.

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