NEW DELHI: The Ministry of Electronics and IT (MeitY) will push the finance ministry to approve additional incentives to attract electronics manufacturers into the country, according to two government officials.
The sops include interest subsidy on loans, credit guarantees for plant and machinery and renewal of the Electronic Manufacturing Cluster (EMC) scheme after the earlier one ended last year, they said.
The incentives will help India wean manufacturers away from countries such as China, officials said, especially after the government said that new manufacturing units would be taxed at15%.
“We have a window of 6-12 months to attract companies which are relocating to India, so we need to move fast,” a senior government official said, referring to the ongoing Sino-US trade conflict that is pushing some companies to move from China.
MeitY is following up with the finance ministry regarding its proposals, which were sent earlier in the year, the second official said.
MeitY had proposed three new schemes after the Modified Special Incentive Package Scheme (MSIPS), EMC and the Electronic Development Fund, designed to aid India’s manufacturing push in electronics, ended last year.
ET reported earlier that MeitY’s proposals included 4-6% interest subsidy on loans for new investment, renewal of the EMC scheme and waiver of collateral for loans taken to set up machinery.
Last month, FM Nirmala Sitharaman announced measures to boost economic growth. This included a scheme to tax any manufacturing firm incorporated on or after October 1at 15%, provided it does not avail of any other exemption or incentive. The firm should also start production by March 31, 2023, the government said.
MeitY and the industry say that more incentives are needed for India to compete with established manufacturing powerhouses China, Vietnam and Thailand.