Lok Sabha Question No. 3877 (UNSTARRED), answered on 2024-12-18
Subject: Greenfield EMCs
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Shri Daggumalla Prasada Rao

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 3877

TO BE ANSWERED ON 18.12.2024

## GREENFIELD EMCS

## 3877.      SHRI DAGGUMALLA PRASADA RAO:

Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be pleased to state:

(a)  the  measures  taken  by  the  Government  to  regulate  the  import  of electronics components and promote export led manufacturing of electronic components in the country during the last five years;

(b)  the  total  number  of  Greenfield  EMCs  and  Common  facility  centres approved under the Electronics Manufacturing Clusters (EMCs) Scheme in the country, State-wise;

(c) the total number of applications received from the State Government of Andhra Pradesh under the EMC 2.0 Scheme till date along with the number of projects approved and funds allocated for the same;

(d) the total number  of foreign companies permitted for electronics manufacturing units through direct investment and progress made under the same; and

(e) the policies and programmes introduced by the Government to transform India to an Electronics System Design and Manufacturing (ESDM) hub and progress achieved till date?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI JITIN PRASADA)

(a):    To  broaden  and  deepen  the  electronics  component  manufacturing ecosystem,  Government  of  India  launched  schemes,  namely,  Scheme  for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)  and  Production  Linked  Incentive  Scheme  (PLI)  for  Large  Scale Electronics Manufacturing. The SPECS provides financial incentive of 25% on the capital expenditure to offset the disability for domestic manufacturing of  electronic  components  and  semiconductors  in  order  to  strengthen  the electronics manufacturing ecosystem in the country. Similarly, for scaling up production  and  export,  the  PLI  for  Large  Scale  Electronics  Manufacturing for  target  segment  Mobile  Phone  and  Electronic  Components  provides  an incentive of 6% to 4% on the incremental sales to the target segments for a period of 5 years. Measures undertaken by the Government to strengthen the regulatory  framework  and  position  India  as  a  global  hub  for  electronics manufacturing are placed at Annexure-I.

(b):    Ministry  of  Electronics  and  Information  Technology  (MeitY)  notified Electronics Manufacturing Clusters (EMC) Scheme on 22 nd October 2012, to provide  support  for  creation  of  world  class  infrastructure  for  attracting investment  in  Electronics  System  Design  and  Manufacturing  (ESDM) Sector. The scheme was closed for receipt of applications from 21 st October, 2017.  Under  the  scheme,  19  Greenfield  EMCs  and  3  Common  Facility Centres (CFCs) over an area of 3,464 acres with project cost of INR 3,499 crore  including  central  Grant-in-aid  of  INR  1,470  crore  were  accorded

- approval in fifteen (15) states across the country. The state wise details are placed at Annexure-II.
- (c):    Under  the  Modified  Electronics  Manufacturing  Clusters  (EMC  2.0) Scheme  notified  on01.04.2020,Ministry  of  Electronics  and  Information Technology (MeitY) has received one application from M/s Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for setting up of EMC project over  an  area  of  540  acres  at  Kopparthi,  Kadapa  District,  Andhra  Pradesh. This  has  been  accorded  approval  on  18.03.2021  with  project  cost  of  INR 748.76  crore  which  includes  Central  Financial  assistance  of  INR  350.00 Crore.
- (d):    Since  April  2019,  India  has  received  FDI  amounting  to  ~USD  3,290 million from 356 companies in electronics sector. Financial progress of the FDI received since 2019-20 is as follows:
- (e):  The policies and schemes undertaken by the Government to transform India as global electronics manufacturing hub is placed at Annexure-III. As a result of these policy interventions, the domestic production of electronic items has increased significantly from INR 1.90 lakh crore (USD 30 Bn.) in 2014-15 to INR 9.52 lakh crore (USD 115 Bn.) in 2023-24 at a CAGR of more than 17%.  Export of electronic goods has increased from INR 38,263 crore (USD 5.7 Bn.) in 2014-15 to INR 2.41 lakh crore (USD 29.1 Bn.)in 2023-24 growing at CAGR of more than 20%.

| Financial Year          | Investment (in USD Mn)   |
|-------------------------|--------------------------|
| 2019-20                 | 422.37                   |
| 2020-21                 | 375.31                   |
| 2021-22                 | 416.99                   |
| 2022-23                 | 539.96                   |
| 2023-24                 | 695.75                   |
| 2024-25 (till Q2)       | 839.57                   |
| Total                   | 3289.94                  |
| Source: FDI Cell, DPIIT | Source: FDI Cell, DPIIT  |

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The  following  reforms  have  been  taken  to  improve  the  regulatory  environment  for electronic manufacturing in the country:

1. Compulsory  Registration  Order  for  greater  flexibility  in  certification: To ensure that the electronic product manufactured in the country conform to the safety standards,  the  government  has  notified  electronic  products  under  the  schedule of Electronics  and  Information  Technology  Goods  (Requirement  of  Compulsory Registration)  Order,  2021  as  per  the  scheme  -II  of  BIS conformity  Assessment Regulation, 2018 under BIS Act 2016. The details are available on MeitY's website (http://meity.gov.in/esdm/standards).
2. Phased Manufacturing Programme (PMP): PMP has been notified to  promote domestic  value  addition  in  Cellular  Mobile  handsets,  Wrist  Wearable  Devices (commonly known as smart watches), and Hearable Devices and sub-assemblies / inputs / parts / sub-parts thereof.
3. Public Procurement Order (PPO): Public Procurement Order prioritizes domestically  manufactured  products  in  public  procurement  to  enhance  domestic industry capabilities by progressively increasing local value addition, contributing to the broader goal of self-reliance.
4. Amendment  in  Import  Policy  to  discontinue  compulsory  registration  on CHIMs  Portal: DGFT  vide notification 41/2024-25 dated 29.11.2024 has discontinued  the  Compulsory  Registration  under  Chip  Import  Monitoring  System (CHIMs)  for  ITC  HS  Codes  85423100,  85423900,  85423200,  85429000  and 85423300  for  import  of  semiconductor  chips  covered  under  Chapter  85  of  ITC (HS), 2022, Schedule-1(Import Policy). It shall enhance ease of doing business for the electronics and semiconductor ecosystem.
5. 100%  Foreign  Direct  Investment  (FDI) :  As  per  extant  FDI  policy,  FDI  up-to 100% under the automatic route is permitted for electronics manufacturing (except from  countries  sharing  land  border  with  India),  subject  to  applicable  laws  / regulations; security and other conditions. The FDI approval to land border sharing countries are being facilitated through the Press Note 3 (PN3) notification.
6. Simplifying  the  Visa  Issuance  process  for  PLI  sector: The  government  has revised and expanded the issuance of PLI business visa for electronic manufacturing from PLI approved companies to any company falling under the PLI sector. Further, the process to apply for a PLI business visa has been made completely online.
7. Clarification  on  Import  of  Goods  at  Concessional  Rate  (IGCR)  across  the electronics  value  chain  and  MOOWR units: CBIC vide Circular No. 26/2024Customs dated 21.11.2024 clarified that the goods being imported by the intermediate goods manufacturer which is MOOWR unit for further supplying after some  manufacturing/  value  addition  to  the  final  manufacturer  of  Cellular  mobile phones are duly eligible for  the  benefit  of  concessional  rate  of  duty  under  IGCR Rules, 2022, as long as all other conditions are met. Further, it is also clarified that the  MOOWR  unit  may  now  avail  IGCR  exemption  along  with  duty  deferment simultaneously, provided that it complies with the conditions prescribed in IGCR Rules and MOOWR provisions.
8. Clarification on movement  of goods from section 65 unit to another warehouse/section  65  unit: CBIC  vide  instruction  no.  16/2024-  Customs  dated 25.06. 2024 has clarified that the transfer of resultant goods from section 65 unit to another  warehouse/section  65  unit  is  permitted  subject  to  compliance  of  the conditions prescribed under MOOWR.
9. Amendment  to  support  manufacturing  of  hearing  and  wearable: CBIC  vide notification  no.  33/2023-Customs  dated  27.04.2023  amended  PMP  notification of hearing and wearable stating that the provision of rule 2 (a) of the General Rules of Interpretation  of  the  First  Schedule  of  the  Customs  Tariff  Act,  1975  shall  not  be applicable  to  the  import  of  components/inputs/parts/sub-parts  even  when  such goods are presented together.
10. Rationalisation  of  Tariff  Structure: Tariff  structure  has  been  rationalized  to promote domestic manufacturing of electronic goods, including, inter-alia, Cellular mobile phones, Televisions, Electronic components, Set Top Boxes for TV, LED products and Medical electronics equipment.
11. Exemption of Basic Customs Duty on capital goods :  Notified capital goods for manufacture of specified electronic goods are permitted for import at 'NIL' Basic Customs Duty.
12. Simplified  import  of  used  plant  and  machinery :  The  import  of  used  plant  and machinery  having  a  residual  life  of  at  least  5  years  for  use  by  the  electronics manufacturing industry has been simplified through the amendment of Hazardous and Other Wastes (Management and Trans boundary Movement) Rules, 2016, vide Ministry of Environment, Forest and Climate Change Notification dated 11.06.2018.

## Annexure-II

| S.No.   | State          | Location                                                                 | Area (Acres)   | Implementing Agency                                                | Financial Outlay (Rs. in crore)   | Financial Outlay (Rs. in crore)   |
|---------|----------------|--------------------------------------------------------------------------|----------------|--------------------------------------------------------------------|-----------------------------------|-----------------------------------|
|         |                |                                                                          |                |                                                                    | Project Cost                      | Grant- in-aid                     |
| 1       | Andhra Pradesh | Sri City, Satyavedu Mandal, Chittor District                             | 94             | Sri City EMC Pvt. Ltd.                                             | 56.75                             | 27.34                             |
| 2       | Andhra Pradesh | EMC-1@ Tirupati, Renigunta and YerpaduMandal , Chittor District          | 113.27         | Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC)  | 74.27                             | 37.14                             |
| 3       | Andhra Pradesh | EMC-II@ Tirupathi, Vikruthamala Village, YerpaduMandal, Chittor District | 501.40         | Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC)  | 248.90                            | 98.46                             |
| 4       | Assam          | Bongora, Kamrup District, Assam                                          | 100            | Assam Electronics Development Corporation Limited (AMTRON)         | 119.85                            | 50.00                             |
| 5       | Chhattisgarh   | Sector-22, Naya Raipur                                                   | 116.48         | Chhattisgarh State Industrial Development Corporation ltd. (CSIDC) | 103.88                            | 43.08                             |
| 6       | Goa            | Tuem, North Goa District                                                 | 147.55         | Department of IT, Government of Goa                                | 161.32                            | 73.77                             |
| 7       | Gujarat        | Mundra, Kutch District                                                   | 631.38         | Mundra Solar Techno park Private Limited (MSTPL)                   | 745.14                            | 315.69                            |
| 8       | Jharkhand      | Adityapur, Saraikela- Kharsawan District                                 | 82.49          | Jharkhand Industrial Area Development Authority (JIADA)            | 97.88                             | 41.48                             |
| 9       | Kerala         | Kakkanad , Ernakulam District                                            | 66.87          | Kerala Industrial Infrastructure Development Corporation (KINFRA)  | 35.06                             | 15.89                             |
| 10      | Madhya         | Badwai-Bhopal                                                            | 50             | Madhya Pradesh                                                     | 47.19                             | 20.86                             |

| S.No.   | State             | Location                                                 | Area (Acres)   | Implementing Agency                                                         | Financial Outlay (Rs. in crore)   | Financial Outlay (Rs. in crore)   |
|---------|-------------------|----------------------------------------------------------|----------------|-----------------------------------------------------------------------------|-----------------------------------|-----------------------------------|
|         |                   |                                                          |                |                                                                             | Project Cost                      | Grant- in-aid                     |
|         | Pradesh           |                                                          |                | State Electronics                                                           |                                   |                                   |
| 11      |                   | Purva-Jabalpur                                           | 40             | Development Corporation Ltd.(MPSEDC)                                        | 38.57                             | 17.76                             |
| 12      | Odisha            | Infovalley, Bhubaneswar Industrial Area, Khurda District | 203.37         | Odisha Industrial development Corporation (IDCO)                            | 200.76                            | 93.09                             |
| 13      | Rajasthan         | Salarpur Industrial Area, Khushkera, Bhiwadi             | 50.3           | ELCINA Electronics Manufacturing Cluster Pvt. Ltd (EEMCPL)                  | 46.09                             | 20.24                             |
| 14      |                   | Karoli Industrial Area, Bhiwadi, District-Alwar          | 121.51         | Rajasthan State Industrial Development& Investment Corporation Ltd. (RIICO) | 29.13                             | 11.49                             |
| 15      | Telangana         | E-city, Hyderabad                                        | 603.52         | Telangana State Industrial                                                  | 667.6                             | 252.42                            |
| 16      |                   | Maheshwaram, Ranga Reddy                                 | 310.70         | Infrastructure Corporation (TSIIC)                                          | 436.97                            | 138.6                             |
| 17      | Uttar Pradesh     | Ecotech-VI Industrial Area, Greater Noida                | 99.41          | TEGNA Electronics Pvt. Ltd. (TEPL)                                          | 115.32                            | 50.00                             |
| 18      | West Bengal       | Falta , South 24 Parganas District                       | 58.04          | West Bengal Electronics Industry                                            | 58.86                             | 25.64                             |
| 19      |                   | Naihati, North 24 Parganas district                      | 70             | Development Corporation Limited (WEBEL)                                     | 58.31                             | 25.7                              |
| 20      | Karnataka (CFC)   | Hebbal Industrial Area, Mysore                           | 1.50           | Mysore ESDM Cluster                                                         | 48.53                             | 32.31                             |
| 21      | Maharashtra (CFC) | Shendra Industrial Area, Aurangabad District             | 1.98           | Deogiri Electronics Cluster Private Limited (DECPL)                         | 41.09                             | 29.29                             |
| 22      |                   | Pimpri Industrial Area, Pune                             | 0.61           | MCCIA Electronic Cluster Foundation (MECF)                                  | 67.00                             | 50.00                             |
| Total   | Total             | Total                                                    | 3,464.38       |                                                                             | 3,499.63                          | 1,470.25                          |

National  Policy  on  Electronics  2019 :  The  National  Policy  on  Electronics  2019  (NPE 2019) has been notified on 25.02.2019. The vision of NPE 2019 is to position India as a global  hub  for  Electronics  System  Design  and  Manufacturing  (ESDM)  by  encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.

To attract  and  incentivize  large  investments  in  the  electronics  value  chain  and  promote exports, following schemes and interventions have been made:

1. Program  for  Development  of  Semiconductors  and  Display  Manufacturing Ecosystem :  To  widen and deepen electronics manufacturing, the Union Cabinet on 15.12.2021, approved a comprehensive program with an outlay of INR 76,000 crore  (>USD  10  Billion)  for  the  development  of  Semiconductors  and  Display manufacturing ecosystem. With the approval of Cabinet, this Programme has been recently modified on 21.09.2022. The modified programme offers Fiscal Support of 50% of Project Cost uniformly for semiconductor fabs across the technology nodes as well as for compound semiconductors, packaging and other semiconductor facilities.

Following Fiscal incentives are now available to eligible applicants:

-  Modified  Scheme  for  setting  up  of  Semiconductor  Fabs :  It  provides fiscal support for setting up semiconductor wafer fabrication facilities in the country. Fiscal support of 50% of the Project Cost is available for setting up of silicon-based semiconductor fabs across all technology nodes.
-  Modified  Scheme  for  setting  up  of  Display  Fabs :  It  provides  fiscal support  for  setting  up  TFT  LCD  /  AMOLED  based  display  fabrication facilities. It provides fiscal support of 50% of Project Cost.
-  Modified Scheme for setting up of Compound Semiconductors / Silicon Photonics /Sensors Fab/ Discrete Semiconductor Fabs and Semiconductor  ATMP  /  OSAT  facilities  in  India :  It  provides  a  fiscal support  of  50%  of  the  Capital  Expenditure  to  the  eligible  applicants  for setting  up  of  Compound  Semiconductors  /  Silicon  Photonics  (SiPh)  / Sensors (including MEMS)  Fab/ Discrete Semiconductor Fabs and Semiconductor ATMP / OSAT facilities in India.
-  Design  Linked  Incentive  Scheme :  It  offers  financial  incentives,  design infrastructure support across various stages of development and deployment of semiconductor design for ICs, Chipsets, SoCs, Systems & IP Cores and semiconductor  linked  design.  The  scheme  provides  both  'Product  Design Linked Incentive' and 'Deployment Linked Incentive'.
2. Production  Linked  Incentive  Scheme  (PLI)  for  Large  Scale  Electronics Manufacturing was notified on April 01, 2020 to provide an incentive of 4% to 6% to eligible companies on incremental sales (over base year) involved in mobile phone  manufacturing  and  manufacturing  of  specified  electronic  components, including Assembly, Testing, Marking and Packaging (ATMP) units.
3. Production Linked Incentive Scheme (PLI) for IT Hardware was notified on March 03,2021 to provide an incentive of 4% to 2% / 1% on net incremental sales (over  base  year)  of  goods  manufactured  in  India  and  covered  under  the  target segment, to eligible companies, for a period of four (4) year. The Target Segment under PLI Scheme includes (i) Laptops (ii) Tablets (iii) All-in-One PCs and (iv) Servers.
- Production Linked Incentive Scheme (PLI) for IT Hardware 2.0: PLI Scheme 2.0 for IT Hardware notified on May 29, 2023 with a budgetary outlay of 17,000 crore provides an average incentive of around 5% on net incremental sales (over base year) of target segment products for a period of 6 years. The target segment products include: Laptops, Tablets, All-in-One PCs, Servers and Ultra Small Form Factor.
4. Scheme  for  Promotion  of  Manufacturing  of  Electronic  Components  and Semiconductors  (SPECS) was  notified  on  April  01,  2020  to  provide  financial

incentive of 25% on capital expenditure for the identified list of electronic goods that  comprise  downstream  value  chain  of  electronic  products,  i.e.,  electronic components, semiconductor / display fabrication units, ATMP units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods. The scheme is open for receipt of applications till 31.03.2024.

5. Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme was notified on  April  01,  2020  to  provide  support  for  creation  of  world  class  infrastructure along with common facilities and amenities, including Ready Built Factory (RBF) sheds / Plug and Play facilities for attracting major global electronics manufacturers  along  with their  supply  chain  to  set  up  units  in  the  country.  The Scheme  provides  financial  assistance  for  setting  up  of  both  EMC  projects  and Common  Facility  Centres  (CFCs)  across  the  country.  The  Scheme  is  open  for receipt  of  application  for  a  period  upto  March,  2024  and  further  period  upto March, 2028 is available for disbursement of the funds to the approved projects.
6. Modified  Special  Incentive  Package  Scheme  (M-SIPS) :  The  Scheme  was notified on 27 th July, 2012 to provide financial incentives to offset disability and attract  investments  in  the  electronics  manufacturing  sector.  It  was  amended  in August, 2015 to extend the period of the scheme, enhance scope of the Scheme by including 15 more product verticals, and attract more investment. The scheme was further  amended  in  January,  2017  to  expedite  the  investments.  The  scheme provides  subsidy  for  capital  expenditure -  20%  for  investments  in  Special Economic Zones (SEZs) and 25% in non-SEZs. The incentives are available for 44  categories  /  verticals  of  electronic  products  and  components  covering  entire electronics manufacturing value chain. The Scheme  was open to receive applications till 31.12.2018 and is in the implementation mode.
7. Electronics Manufacturing Clusters (EMC) Scheme : Electronics Manufacturing Clusters Scheme was notified on 22nd October, 2012 to provide support for creation of world-class infrastructure along with common facilities and amenities for attracting investment. The receipt of application was closed on 21 st October, 2017 and disbursement of funds is applicable upto March, 2026.
8. Electronics  Development  Fund  (EDF) :  Electronics  Development  Fund  (EDF) has  been  set  up  as  a  'Fund  of  Funds'  to  participate  in  professionally  managed 'Daughter  Funds'  which  in  turn  will  provide  risk  capital to startups  and companies developing new technologies in the area of electronics and Information Technology  (IT).  This  fund  is  expected  to  foster  R&D  and  innovation  in  these technology sector.

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