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Boost for Electronics Manufacturing in India-Production Linked Incentive (PLI) Scheme

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Dated:  29.07.2020

 

Production Linked Incentive Scheme-Ministry of Electronics & Information Technology(MEITY)

 

Electronics permeate all sectors of the economy and the electronics industry has cross-cutting economic and strategic importance. In India, electronics manufacturing has grown rapidly with a CAGR of around 25% during the last 4 years. However, this pales in comparison to the actual potential for growth which is curtailed by specific constraints such as large capital investments and rapid changes in technology.

India’s share in global electronics manufacturing has grown from 1.3% in 2012 to 3.0% in 2018. The domestic production of electronics hardware has increased substantially from INR 1,90,366 crore (USD 29 billion) in 2014-15 to INR 4,58,006 Crore (USD 70 billion) in 2018-19. With the domestic demand for electronics hardware expected to rise rapidly to approximately INR 26, 00,000 crore (USD 400 billion) by 2025, India cannot afford to bear the rapidly increasing foreign exchange outgo on account of import of electronics.

SS PLI Scheme Overview

National policy on electronics (NPE 2019): The vision of 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.

Objective: The Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing proposes a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain including electronic components and semiconductor packaging.

Quantum of Incentive: The Scheme shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year.

Target Segments: The Scheme shall only be applicable for target segments namely mobile phones and specified electronic components (as detailed in Annexure-B).

Eligibility: Support under the Scheme shall be provided only to companies engaged in manufacturing of target segments in India. This shall include contract manufacturers as defined in the FDI Policy Circular of 2017.

a. Each application shall be limited to one (1) of the target segments

b. Eligibility shall be subject to thresholds of incremental investment and incremental sales of manufactured goods (as distinct from traded goods). An applicant must meet all the threshold conditions to be eligible for disbursement of incentive. Eligibility threshold criteria are detailed in Annexure A

c. Eligibility under Production Linked Incentive scheme shall not affect eligibility under any other Scheme and vice-versa.

SS Eligibility Highlights

List of Specified Electronic Components eligible under PLI Scheme

 

S No Description of Goods
1 SMT components
2 Discrete semiconductor devices including transistors, diodes, thyristors, etc
3 Passive components including resistors, capacitors, etc. for electronic applications
4 Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks
5 Sensors, transducers, actuators, crystals for electronic applications
6 System in Package (SIP)
7 Micro / Nano-electronic components such as Micro Electromechanical Systems (MEMS) and Nano Electromechanical Systems (NEMS)
8 Assembly, Testing, Marking and Packaging (ATMP) units

 

Application Fee: INR 1,00,000 (Rupees One Lakh only) to be paid electronically to the MeitY/PMA.

 

Important Download Links:

GSR Production_linked_incentive_scheme

PLI-Guidelines-Presentation

 

 

 

Source: MeitY, Govt. of India
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