In the wake of the Covid-19 pandemic, there is a global backlash against China, and recently Union minister Nitin Gadkari has also been reported saying India should look at converting the world’s “hatred” for China into an economic opportunity.
The Ministry of Electronics and Information Technology (Meity) is planning to start receiving applications from May 15 for the newly notified schemes worth over Rs 48,000 crore to promote electronics manufacturing as it wants to utilise the opportunity in making India a suitable alternative to China. In the wake of the Covid-19 pandemic, there is a global backlash against China, and recently Union minister Nitin Gadkari has also been reported saying India should look at converting the world’s “hatred” for China into an economic opportunity.
The sentiment of utilising the current opportunity to promote electronics manufacturing was stressed by IT and communications minister Ravi Shankar Prasad on Wednesday during his meeting with top executives of companies like Apple, Samsung, Xiaomi etc. According to a company official present in the meeting, which took place through video conference, Prasad highlighted that this was the best opportunity India had got in the past 30 years and it should be utilised fully. India can be an alternative to China in terms of electronics manufacturing.
Earlier this month, the government notified three schemes, involving total incentives of over Rs 48,000 crore to boost electronics manufacturing in India and create 20 lakh direct and indirect jobs by 2025. The largest portion of the incentives, of around Rs 40,000 crore, will be allocated to the production-linked incentive (PLI) scheme.
The minister exhorted the electronics industry to explore the new opportunities that are arising out of the adversity and make the country the global hub of electronics manufacturing.
“We have already notified these schemes on April 2…We will issue the guidelines by the end of this week about how to apply, how the scheme will operate. From May 15, we will start receiving the applications,” Meity secretary Ajay Prakash Sawhney told the Financial Express.
Through the three schemes, the government is trying to repeat the success story of auto sector manufacturing in the electronics sector by setting up clusters led by big companies. This type of model will also promote component manufacturing in India. So far, the country has been primarily doing assembling of mobile phones but, going forward, it expects to manufacture components also.
For instance, the objective of PLI scheme is to provide financial incentive to large-scale manufacturing of electronics products and attract large investments in the value chain, including components and semiconductor packaging. The scheme offers an incentive of 4% to 6% on incremental sales (over the base year) of goods manufactured in India for a period of five years. The scheme will be initially rolled out for mobile phones and specified electronic components.