Cabinet approves modified incentive scheme for electronics industries

The union cabinet today approved a proposal to provide a special incentive package to promote large-scale manufacturing in the electronic system design and manufacturing (ESDM) sector. The scheme, called the Modified Special Incentive Package Scheme (M-SIPS), aims at offsetting disabilities and attracting investments in electronics systems design and manufacturing industries in the country.

The scheme provides for 20 per cent subsidy for capital expenditure on investments in special economic zones (SEZs) and 25 per cent subsidy for such investments in non-SEZs.

It also provides for reimbursement of countervailing duty/excise on capital equipment for the non-SEZ units. For high technology and high capital investment units, like fabs, reimbursement of central taxes and duties is also provided for.

The incentives are available for investments made in a project within a period of 10 years from the date of approval, an official release said today.

The incentives are available for 29 category of ESDM products, including telecom, IT hardware, consumer electronics, medical electronics, automotive electronics, solar photovoltaic, LEDs, LCDs, strategic electronics, avionics, industrial electronics, nano-electronics, semiconductor chips and chip components, other electronic components and EMS.

Units across the value chain, from raw materials, assembly, testing, packaging and accessories of these category of products, are included in the incentive list. The scheme also provides for incentives for relocation of units from abroad.