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Proposals worth Rs 1,000 cr cleared to boost electronics manufacturing

Last Updated: Monday, April 22, 2013 - 18:38

New Delhi: Government has cleared investment proposals worth around Rs 1,000 crore under a scheme to promote manufacturing of electronic products and components in the country.

The Department of Information Technology has so far received investment proposals worth Rs 2,000 crore under the Modified Special Incentive Package Scheme (M-SIPS), Telecom Minister Kapil Sibal said on the sidelines of a round table with companies and ambassadors of leading Electronic System Design and Manufacturing (EDSM) countries Monday.

"In terms of the M-SIPS, we got Rs 2,000 crore worth of proposals... Some more are in the offing. We have cleared close to Rs 1,000 crore," the minister said.

Under the M-SIPS, the government will provide up to Rs 10,000 crore in benefits to the industry during the 12th Five Year Plan (2012-17) for promoting domestic production of electronics products and components.

The scheme provides subsidy for investments in capital expenditure with a limit of 20 percent for investments in Special Economic Zone and 25 percent in non-SEZs.

The incentives will be given to investment made in a project within 10 years from the date of its approval.

The government has included 29 categories in ESDM sector that can avail benefit of under M-SIPS.

On meeting with companies and ambassadors from ESDM countries, Sibal said, "Very very encouraging meeting we had. First of its kind. By and large we had positive response. The companies said that they are keen to come to India to do business and increase their manufacturing."

He said that companies had few doubts which were cleared during the round table.

"First was about the predictability of policies. We told them that all these policies, whether for electronics or telecom, are for 10 years.

"Secondly, they were concerned about preferential market access (PMA) and we told them that PMA in government procurement and security will occupy only 3 percent of the market and rest will be free," he added.

Even in this they will have an advantage because a foreign manufacturer will be treated on par with a domestic manufacturer as long as he/she sets up his manufacturing facility in India, the minister noted.

"On security side, we told them that specific items will be identified and why that item will have PMA. Third, they said they had some issues on the taxation side. I told them it is not something that I can resolve and I indicated to them that if they come to us with specific issues I will convey them to the Finance Minister," he said.

Sibal said that companies also raised the issue of lack of infrastructure.

"We told them that look we are building the Delhi-Mumbai corridor and there will be seven new cities in this corridor and there will be world-class infrastructure here ... So there should be no problem.

"If they want to set up their facilities outside this corridor, we will then talk to the local or state government to provide them world-class infrastructure. We also told them that they can also set up say a Japanese electronics manufacturing cluster or a country-wise cluster," he added.

Sibal said that the ministry cleared all the doubts that the companies had raised and they expressed their desire to do business in India.

"They were very happy with all the concessions that we are giving and they realised that electronics markets has a lot of depth and it is a win-win situation for both of us," he noted.

Companies from the US, the UK, Germany, Belgium, Finland, Sweden, Israel, Korea, Japan, Taiwan, etc took part in the round table.

Apart from the ambassadors and head of chambers of commerce from these countries Telecom Secretary M Farooqui, Department of Electronics and IT Secretary J Satyanarayan, senior officials from IT, electronics and telecom also were present.


First Published: Monday, April 22, 2013 - 18:38
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