New policy will enable country to become a hub for global ESDM industry: official

At least 10 electronics manufacturing clusters are likely to materialise in the country within the year, a senior official of the Department of Electronics and Information Technology has said.

Addressing the inaugural session of the ninth Vision Summit of the India Electronics and Semiconductor Association (IESA) here on Thursday, Ajay Kumar, Joint Secretary of the department, said that elements of the National Policy on Electronics, which was approved by the Union Cabinet last October, would enable India to become a hub for the global Electronic System Design and Manufacturing (ESDM) industry.

Dr. Kumar said the government had notified the Modified Special Incentive Package Scheme (M-SIPS), which is applicable to 29 categories of electronic products. The scheme provides for a 25 per cent subsidy on capital investments in new ventures and a 50 per cent grant for common facilities for units located in an area. “By the end of the year, we expect to approve M-SIPS incentives for investment proposals worth Rs. 25,000 crore,” Dr. Kumar said. He pointed out that benefits of M-SIPS were available for period of 10 years after the initial investment.

He said that proposals for establishing electronic manufacturing clusters had come from States such as Andhra Pradesh (Hyderabad and Visakhapatnam), Haryana (Rohtak) and Rajasthan (Bhiwadi). Moreover, proposals for IT Investment Regions at Bangalore, Hyderabad and Bhubaneswar were being processed.

‘Take advantage’

Urging the industry to take advantage of the preference for electronic goods produced within the country, Dr. Kumar said desktops, laptops, inkjet printers and tablets had already been put on the ‘notified’ list. This would require producers to source a certain proportion of the value of inputs from within the country.

He said expressions of interest had been invited for developing a “completely indigenous” Conditional Access System for set-top boxes used with cable TV networks.

Referring to the establishment of a semiconductor wafer fabrication unit, for which the government had floated expressions of interest from global companies, Dr. Kumar said an empowered committee was likely to identify the partner by March.

The committee was also examining the crucial issue of the quantum of incentives that would be necessary to attract investments into the project that would cost hundreds of millions of dollars, said an industry source.

Satya Gupta, Chairman, IESA, said the industry was planning to establish technology incubation centres.

He said the IESA, in association with the governments of Karnataka and Odisha, had commissioned detailed project reports to identify brownfield and greenfield clusters.

“We envisage brownfield clusters at Electronics City, Whitefield, and Peenya in Bangalore,” he said. Sites for greenfield clusters, which would require 100 acres apiece, had not been identified, he said.

The Karnataka government, Dr. Gupta said, was supporting the industry in developing innovation as well as incubation centres. While the innovation centres would help start-ups develop prototypes, the latter would help in the development of chips with access to tools, intellectual property. “This would help start-ups by lowering their costs,” he said.

The summit concludes on Friday.


  • ‘By year-end, we expect to approve M-SIPS incentives for investment proposals worth Rs. 25,000 cr.’

  • ‘State government is supporting the industry in developing innovation as well as incubation centres’


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