NEW DELHI: In what will provide the much-needed impetus of the electronics manufacturing, especially mobile phones, Finance minister Nirmala Sitharaman has announced a new scheme for manufacturing of mobile phones, electronics component and semiconductor units while presenting the Union Budget 2020.
A new scheme to push domestic electronics manufacturing was a key demand of the industry, since three key scheme which were incentivising local manufacturing had ended last year.
Acknowledging the potential of electronics manufacturing in bringing investments and job creation, Sitharaman said that India needs to “manufacture networked products domestically and become part of the global value chain.”
She added that electronics manufacturing has tremendous cost advantages with very high potential in job creation. Domestic manufacturing will also bring in large investment.
“I wish to announce a new scheme for electronics manufacturing, mobile phone manufacturing, electronics components and semiconductor units. With suitable modification, the scheme can also be used for manufacturing of medical devices.” Sitharaman however said that the details of the scheme will be announced later.
ET had reported earlier that the Internet and Mobile Association of India (IAMAI) and other industry associations has recommended bringing back the Modified Special Incentive Package Scheme (M-SIPS), in a bid to attract global investments in exports driven high-end mobile manufacturing.
The M-SIPS scheme provided a capital subsidy of 20-25% to manufacturers — was instrumental in bringing large scale investment to India — but the government stopped accepting fresh applications under the scheme at the end of 2019. Similarly, the Electronic Manufacturing Clusters (EMC) and Electronic Development Fund (EDF) scheme had also ended last year.
The global mobile handset market is expected to touch $648 billion by 2025.