Govt mulling $3 billion incentives package for electronics R&D, products

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Subscribe to enjoy similar stories. The Centre is working on a $3 billion package for the electronics industry to encourage private sector research and development (R&D) and create leading brands, two people aware of the development said. A task force set up by the ministry of electronics and information technology (Meity) six months ago studied the viability and market-readiness of such a scheme and submitted actionable points, the people said on the condition of anonymity.

Once approved, the proposal will go to the finance ministry. Talks are on to identify the best ways to encourage maximum local value addition, one of the two people said. “It is crucial that the Centre moves fast to boost product manufacturing in India—without this, India’s assembly-focused electronics manufacturing services (EMS) players will soon hit a glass ceiling in terms of how far they can grow," the official said.

The second official said the Centre is considering these incentives “to build a domestic electronics market that local fabs can supply to, which, in turn, will attract bigger global companies to the semiconductor ecosystem as well". Also read | New national electronics policy to have renewed focus on creating Indian brands, products At Meity, there is consensus that a large outlay is needed to build a value-added domestic electronics market to avoid the fate of local brands after the entry of Chinese phonemakers, the second official said. The incentives are likely to be segregated into three tranches, and will vary with the revenue of companies, the official said.