Government set aside Rs 30,000 cr for startups in IT hardware, electronics.
NEW DELHI: India has set aside Rs 30,000 crore worth of incentives and subsidies to firms who will be interested in setting up electronic manufacturing units in the country. Startups interested in creation of apps for mobile phones, tablets and other electronic hardware will also benefit, as a package of Rs 10,000 crore is in the offing for them."About Rs 20,000 crore has already been approved. While the rest Rs 10,000 crore has been put forth for approval by the Cabinet for startups interested in IP creation, as an electronic development fund - EDF," J Satyanarayana, who took over this year as the new IT Secretary, at Department of Electronics and IT told ET.
Besides, the government has also drafted a marketing plan to encourage 'Made in India' electronics in the global market. "We have developed a marketing strategy. We will visit global trade fairs and exhibitions and invite component and electronic makers in Korea, Taiwan, China, Japan, Germany and US, to locate units in India," Mr Satyanarayana added. A delegation of Ministry officials is visiting a trade fair in Germany, next month to scout for potential candidates to set up units in India.
The Union Cabinet last month approved Rs 10,000 crore, as financial support for the development of electronic manufacturing clusters. Another package of Rs 10,000 crore has been approved to promote large scale manufacturing in India. About 2-3 firms have already expressed interest. "We expect the first few firms to utilize the incentives and set up units by next year," he said.
Termed modified special incentive package (MSIPS), it will provide incentives to the tune of 20%-25% as subsidy for capital expenditure incurred.
This is the second time that the government is coming out with such sops. In the past few years, government's move to attract semiconductor fabs to India have fallen on deaf ears. Not a single company utilized the incentives for chip manufacturing in India, the last time incentives were doled out during former IT minister Dayanaidhi Maran's tenure.
"It has been disappointing. Attracting investments involves a multi pronged strategy to develop talent, give incentives, and encourage IP creation, which we have embarked upon now," Mr Satyanarayana added.
The incentives will be provided in 29 categories which includes telecom, IT hardware, medical electronics, auto electronics, avionics and nano-electronics.
The incentives will also be applicable to firms such as Nokia, Samsung, LG, Dell, Lenovo who are already manufacturing in India.
India's electronics import bill is expected to cross $400 billion by 2020, which would exceed the oil import bill, thus threatening the country's dollar reserves. Globally, about $1.7 trillion worth of electronics hardware manufactured every year, of which India contributes only 1.3%.
SOURCE : Economictimes.indiatimes.com
