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MeitY To Seek Cabinet Nod For Rs 40,000 Crore Electronics Manufacturing Push

Updated: Nov 29, 2024 03:25:06pm
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MeitY To Seek Cabinet Nod For Rs 40,000 Crore Electronics Manufacturing Push

New Delhi, Nov 29 (KNN) The Ministry of Electronics and Information Technology (MeitY) is poised to seek Union Cabinet approval for a substantial Rs 40,000 crore package aimed at bolstering local electronic components manufacturing.

According to industry executives and government officials, the proposed scheme is expected to be presented to the Cabinet in December, with potential investments commencing from April next year, reported ET.

The comprehensive package is designed to create a robust ecosystem for electronic component production, focusing on non-semiconductor sectors.

It will likely include subsidies on capital expenditure and incentives tied to production and employment generation, ultimately seeking to integrate domestic companies into the global electronics manufacturing value chain.

Industry projections indicate a significant growth trajectory for electronic components in India. The Confederation of Indian Industry estimates that demand will surge from USD 45.5 billion in 2023 to USD 240 billion by 2030, driven primarily by increasing local mobile phone production.

The government's strategic objective is to elevate local value addition in electronics manufacturing from the current 15-18 per cent to 35-40 per cent during the scheme's tenure, with an eventual target of 50 per cent.

The proposed scheme is anticipated to attract approximately Rs 82,000 crore in investments, with an ambitious target of producing components worth Rs 1.9-2.0 lakh crore.

Government officials are meticulously conducting final-stage discussions to ensure smooth implementation and prevent potential industry pushback, learning from previous experiences with incentive schemes.

If approved, companies will have a 90-day window to prepare, identify potential customers, and establish technology partnerships.

The initiative is particularly focused on supporting the rapidly expanding manufacturing of mobile phones and IT hardware, building upon two existing production-linked incentive schemes that currently support electronic product assembly.

The scheme's success hinges on collaborative efforts, with the industry seeking expedited approvals for joint venture agreements with technology partners from Taiwan, South Korea, Japan, and China.

Smartphone and IT hardware brands are actively working to encourage their supply chain companies to invest in India through technology transfers and strategic partnerships.

As India continues to position itself as a global manufacturing hub, this ambitious initiative represents a critical step towards reducing dependence on imports and strengthening the domestic electronics manufacturing ecosystem.

(KNN Bureau)

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