Electronics Component Manufacturing Scheme

DETAILS The scheme "Electronics Component Manufacturing Scheme" has been launched by the Ministry of Electronics and Information Technology, Government of India. It aims to provide financial incentives for the manufacturing of identified electronic components and capital goods in Bharat. Through this scheme, turnover-linked and capital expenditure incentives are provided to companies and Limited Liability Partnerships investing in greenfield or brownfield projects within the target segments. The scheme is implemented by a Project Management Agency (PMA) appointed by the Ministry of Electronics and Information Technology (MeitY). The scheme seeks to ensure the effective operation and smooth implementation of electronic system design and manufacturing (ESDM) through detailed industry consultations. It focuses on sub-assemblies, bare components, selected bare components, and the supply chain ecosystem, including capital equipment. BENEFITS Nature of Incentives by Target Segment: The scheme offers three types of incentives depending on the target segment:  Sl. No. Target Segment Nature of Incentive A Sub-Assemblies 1 Display module sub-assembly Turnover Linked Incentive 2 Camera module sub-assembly Turnover Linked Incentive B Bare Components 3 Non-Surface mount devices (non-SMD) passive components for electronic applications Turnover Linked Incentive 4 Electro-mechanicals for electronic applications Turnover Linked Incentive 5 Multi-layer Printed Circuit Board (PCB) Turnover Linked Incentive 6 Li-ion Cells for digital applications (excluding storage and mobility) Turnover Linked Incentive 7 Enclosures for Mobile, IT Hardware products and related devices Turnover Linked Incentive C Selected Bare Components 8 High-density interconnect (HDI)/ Modified semiadditive process (MSAP)/ Flexible PCB Hybrid Incentive 9 SMD passive components Hybrid Incentive D Supply Chain Ecosystem and Capital Equipment 10 Parts/components used in the manufacturing of subassembly (A) and bare components (B) & (C) Capex incentive 11 Capital goods used in electronics manufacturing, including their sub-assemblies and components Capex incentive  Turnover Linked Incentive: Applicable to Sub-assemblies (Segment A) and Bare Components (Segment B). The incentive is calculated on net incremental sales over the base year, multiplied by the applicable incentive rate. Hybrid Incentive: Applicable to Selected Bare Components (Segment C), comprising both turnover-linked incentive and Capex incentive. Capex Incentive: Applicable to Supply Chain Ecosystem and Capital Equipment (Segment D). The incentive is calculated on eligible incremental capital expenditure, multiplied by the applicable incentive rate. Employment Incentive: A portion of the incentive (1% for turnover-linked or 5% for Capex) is specifically disbursed upon meeting cumulative incremental employment threshold criteria. Additional Incentive: An additional 2% incentive on incremental sales is provided for Li-ion Cells if cathode active material (CAM) is sourced or manufactured domestically. An additional 1% incentive on incremental sales is provided for Multi-layer PCB if the laminate is sourced or manufactured domestically. Incentive Rates:  Sl.No. Target Segment ESDM Revenue (₹) Manufacturing Revenue (₹) 1 Display module sub-assembly 250 crore 750 crore 2 Camera module sub-assembly 250 crore 750 crore 3 Non-SMD passive components 50 crore 150 crore 4 Electro-mechanicals 50 crore 150 crore 5 Multi-layer PCB 50 crore 150 crore 6 Li-ion Cells for digital applications (excluding storage and mobility) 250 crore 750 crore 7 Enclosures for Mobile, IT Hardware products and related devices 250 crore 750 crore 8 HDI/MSAP/Flexible PCB 500 crore 1500 crore 9 SMD passive components 250 crore 750 crore (Incentive rates listed year-wise across 6 years of the incentive period) ELIGIBILITY The applicant should be a company registered in Bharat under the Companies Act, 2013 (or the erstwhile Companies Act, 1956) or a Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008. The applicant should be investing in the manufacture of target segment goods in Bharat. The applicant shall meet the threshold criteria regarding investment, sales, and employment as per Annexure 3 of the guidelines. The applicant shall meet the minimum consolidated global Electronics System Design and Manufacturing (ESDM) revenue or manufacturing revenue for the Financial Year. The applicant shall submit separate applications for each target segment product. The applicant shall maintain a net worth greater than or equal to 50% of the proposed investment for target segment D. The applicant shall ensure that Foreign Direct Investment (FDI) is in compliance with the FDI Policy Circular 2020.  Exclusions The applicant shall not consider manufacturing through contract manufacturers as eligible under the scheme. The applicant shall not be eligible for incentives on investments or sales already incentivized under any other Government of Bharat scheme. The applicant shall not include expenditure on land and buildings as an eligible investment. The applicant shall not include expenditure on consumables and raw materials as an eligible investment.