Electronics Policies For MSME

The New Sunrise
Opportunities in the growing

Electronic System Design and Manufacturing (ESDM) Sector
Kapil Sharma, Senior Consultant, DeitY

Why India?
1. Huge Market
2.Large Talent Pool
3.Conducive Policy
4.Competitive Operating Costs
Indian Electronics Market: Demand & Production
Trends for 2020
450.0
400
400.0 CAGR – 37%
350.0
Demand & Production
300.0
250.0 $300 Bn
200.0
150.0
Demand CAGR – 24.4%
99.5
100.0
69.6
CAGR – 15%
50.0
32.5
0.0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Year Values in US$ Billion
If situation is not corrected, Electronics import may exceed oil import by 2020.

MSME Sector
4.5%
CAGR
48 Mn SMEs growing @ 4.5% 51% Investment Decline through PE Route

45% of India’s Industrial Output
6,000 Products Sector fell from $306.27 Mn to $151 Mn
40% of India’s Exports
40% of India’s Workforce (2nd after Agriculture) Total Gap in MSME Funding: $126 Mn

MSME Sector: Challenges

Conducive Policy Environment
National Policy on Electronics

Vision 2020
“To create a globally competitive electronics design and

manufacturing industry to meet the country's needs and
serve the international market”
Investment : US$ 100 Billion

Production : US$ 400 Billion
Employment : 28 Million

Mission
 To promote Indigenous Manufacturing in the entire value chain of ESDM for
economic development
 To develop capacities for manufacture of strategic electronics within the country
 To promote a vibrant and sustainable ecosystem of R&D, design, engineering and
innovation to enhance manufacturing capabilities in electronic raw materials,
components, sub assemblies as well as products
 To develop high quality electronic products at affordable price for inclusive adoption
and deployment to improve productivity, efficiency and ease of operations in other
sectors
 To promote environmentally friendly global best practices in the usage and disposal
of electronic products
Over 50 Strategies specified in NPE

5 Pillars
 To set up Semiconductor Wafer FABs
 To introduce Modified Special Incentive Package scheme by providing capital grant

and setting up of electronics manufacturing clusters
 To set up a dedicated “Electronic Development Fund” for promotion of innovation,

R&D, Indian Intellectual Property (IP) and development of Indian microprocessor
 To provide Preferential Access to Indian electronics products/ manufactured-in-

India electronics products for all government procurements and procurement by
Government licensees, PSUS etc.
 To set up of a National Electronics Mission (NEM)

Modified Special Incentive Package Scheme (MSIPS)
 Substantial CAPEX Subsidy

 20% in SEZ
 25% in non-SEZ
 Reimbursement of CVD/ Excise for

capital equipment in non-SEZ units
 Reimbursement of Central taxes

and duties for 10 years in select
 Incentives available in addition to individual
high tech units like FABs and ATMPs
state incentives
 R&D Expenditure taken as part of
 New Units/ Relocation/ Diversification/
CAPEX for benefits.
Modernization of existing Units
 R&D benefits available upto 50% of
 Incentives available for 10 years from the
the total project cost
date of approval
Subsidy of 20%-25%  Scheme in force till 26th July 2015

Key Budget 2014 Features for Electronics Manufacturing
Investment Allowance under Section 32AC
 Investment Allowance @15% to a

manufacturing co. investing > `25 Crore
in any year in new plant & machinery.
 Benefit available for 3 years i.e. for

investments made upto 31.3.2017. i.e.
FY 2015-2016; 2016-2017 & 2017-2018
 Manufacturers may avail
 The schemes announced in 2013 will
run at parallel till 31.3.2015 i.e.
both MSIPS subsidy of upto
Investment Allowance @15% to a 25% & Investment Allowance
manufacturer investing > `100 Crore in of 15%
any year in new plant and machinery
during the financial years 2013-14 and Caveat: Definition of Capex and the way the
2014-15 subsidy is calculated differs for both MSIPS &
Investment Allowance

Key Budget 2014 Features for Electronics Manufacturing
 SAD exempted on import of inputs/components used in the manufacture of

personal computers (laptops/desktops) and tablet computers falling under
heading 8471.
 BCD on Telecom equipment not covered under ITA increased from zero to 10%
 In order to augment low cost foreign borrowing for Indian companies, the eligible
date of borrowing in foreign currency extended from 30.6.2016 to 30.6.2017 for
a concessional tax rate of 5 percent on interest payments. This tax incentive is
extended to all types of bonds instead of only infrastructure bonds.
Electronics Manufacturing Clusters
World Class Infrastructure

Development
 Roads
 Power
 Water
 ETPs
 Testing Facilities
 Subsidy upto ~ `500 Million per 100
 Social Infrastructure acres of land (50% for Greenfield &
 Govt. Regulatory Support 75% for Brownfield EMCs)
 Open for application till 2017

Target: 200 Greenfield EMCs by
2020  8 Greenfield & 56 EMCs for MSIPS
Subsidy of 50%-75% approved by Govt. till June’14.

Greenfield Electronics Manufacturing Clusters
# Chief Location Proposed Financial

Promoter Area Outlay
(Acres) (INR Crore)
1 APIIC Hyderabad 602.37 552.78
2 APIIC Maheshwaram 310.0 342.91
3 ELCINA Bhiwadi 100.66 100.48
4 MPSEDC Bhopal 50 44.25
5 MPSEDC Jabalpur 40 40.95
6 KINFRA Kakkanad 75 129.87
7 GMR Hosur 527.10 549.50
8 IDCO Bhubaneswar 215.8 207.37
Total 1920.93 1968.11

Semiconductor FAB
 Two Semiconductor FABs

approved by GoI
 #1 IBM+Jaypee Associates at
Greater Noida, near Delhi
 #2 STMicroelectronics+HSMC
at Prantij, Gujarat  Technology Nodes:
90/65/45/28/22/20 nm
 Investment over $10 Bn
 Capacities: 80,000 WSPM

Preference to Domestically Manufactured Electronics Goods
List of notified items
 Desktop PCs
 Tablet PCs
 Laptops
 Preference to domestically manufactured
 Dot Matrix Printer electronic goods in Government procurement
 Extent of Government procurement from

 LED Products domestic manufacturers will not be less than
30 % of the total procurement.
 Smart Cards
 WTO Compatible
 23 Telecom Products  Applicable to both Indian Cos. & MNCs

Export Incentives
Export Incentives on FOB

Value
Around 117 Electronic

Products notified under
Focus Product Scheme for
Incentives Exports by DGFT
2%-5%
Electronics Development Fund (EDF)
 “Fund of Funds” to
participate in Daughter
Funds (Angel Funds &
Venture Funds)
# EDFs under Approval
 Walden India Fund  Fund to promote Innovation, IP Generation,

R&D, Product Commercialization etc. in
 KITVEN Fund ESDM, Nano-Electronics & IT sectors.
EDF
 SIDBI Fund
Typical Daughter fund
Daughter – infra
fund
# GoI announced Venture Fund Typical
worth `10,000 in the Budget of Typical
Daughter fund
Daughter
fund
2014-15 Daughter fund
-Innovation

Compulsory Registration for Safety Standards
 Electronic Game (Video)

 Laptop/Notebook/Tablets
 Plasma/ LCD/LED Television of screen
size 32” or above
 Optical disc players with built in
amplifiers or input power 200w and
above,
 Microwave Ovens
 VDUs, Video Monitors of screen size 32”
above
 Printers/Plotters
 Scanners  15 electronics products notified under safety
 Wireless Keyboards standards on October 3, 2012
 Telephone Answering Machines
 Amplifiers with input power 2000w and  Order came into effect from July 2013
above
 Electronic Musical Systems with input  Allows Self registration
power 200w and above
 Electronics clocks with Main powers  BIS accredited labs to test the goods
 Set Top Box
 Automatic Data Processing Machine  Further 9 products recommended for inclusion

HR Incentives
Skill Development Scheme
 Vocational courses based on

Industry Requirement from
200-400 hours in 6 different
States/UT.
 Targeted at both Skilled/
 Target: 500 Training Centers to educate & train 5
Unskilled talent Million Indians in ESDM sector skills (about 150
 NIELIT Accredited Centers/ Training Centers already affiliated)
Training Partners
 31 ICT and Electronics Academies-Scheme under
 Electronic Sector Skill Council approval
 Telecom Sector Skill Council.
 Special Manpower Development Programme-
Subsidy to Manufacturers on Phase III for VLSI and chip design for 10,000
students
Training Cost
75%  2500 PhDs annually for the ESDM Sector

B2B Technology Transfer/ JV Platform
Initiative:
Technology Transfer/
Acquisition/ Joint Venture
Platform on DeitY Website
Purpose:
 To provide a platform to
 26 Companies already have their
Technology and Joint
technologies/ intent of JV on the
Venture seekers to engage
platform
potential partners

Scheme for supporting MSMEs in the ESDM Sector
 To recognize and motivate

the Micro Small and Medium
Scale Enterprises in the
Electronic System Design &
Manufacturing (ESDM)
sector
Eligibility:
 The Scheme aims at  All the Micro, Small and Medium enterprises
providing financial support to registered in India, as defined in the MSME
MSMEs to: Development Act are eligible under the Scheme
Time Period:
 promote manufacturing  The Scheme is for 2 years from the date of its
notification for the MSMEs
 build quality into Indian  The scheme would be applicable for 2 years (max) or
manufacturing no. of models proposed under the Scheme or till the
allocated budget is available for that particular area
 to encourage exporters
of the scheme, whichever is earlier

Scheme:
Reimbursement of expenses
relating to compliance of
electronic goods with “Indian
Standards” notified by DeitY
Purpose: Total Grant Available:
Grant – In - Aid  The total reimbursement for one

model is limited to `1 Lakh
 The Total Reimbursement available

under this section of the Scheme is
`2 Crore for 200 models (max)

Scheme:
Reimbursement of expenses
for testing and certification
required for export
Grant – In – Aid to comply with  The total reimbursement under the

the regulations/standards of the Scheme for one model is `1.25 Lac
buying countries (max)
 The total reimbursement available
under this section of Scheme is `20
Crore for 800 models (max)

Scheme:
Development of Electronic
Manufacturing Clusters
(EMCs) by MSMEs

 Reimbursement of expenses for
diagnostic study, soft  The GIA of `10 Lac /Cluster (max)
intervention and preparation of would be available for setting up of
DPR etc.
20 Clusters
 GIA will be provided to the local
industry association or State
Govt. Agency or SPV for the  The Total GIA available under this
purpose Scheme is `2 Crore

National Awards in ESDM Sector
Scheme:
National Awards in ESDM

Sector
Purpose: Eligibility:
 Units/ Organizations/ Entities involved in
 Recognize achievements of ESDM
successful companies  IP resultant from Innovation to be borne
 Motivate entrepreneurs out of India
 Encourage innovation & Time Period:
investment  3 Years
 For the Years 2014-15, 2015-16 & 2016-17

National Awards in ESDM Sector
Award Categories:
 Best Exporter (1st & 2nd)
 Best Innovation (1st & 2nd)
 Fastest Growth (1st & 2nd)
 Fastest Growth in MSME (1st,

2nd & 3rd)
 Best EMC (1st)

Total Award Outlay:
 Best Start-up (1st & 2nd)
 2014-15 : `116.9 Lakh
 Exemplary Work (1st)
 2015-16 : `119.59 Lakh
 New Cos. set up after ESDM  2016-17 : `122.4 Lakh
policies (1st & 2nd)

Govt./ DeitY Policies Initiatives for R&D and IPR
 Weighted deduction of 200% of expenditure incurred on in-house R&D

facilities approved by Department of Scientific and Industrial Research
(DSIR) is available in terms of Section 35(2AB)(1) of the Income Tax Act.
 A super deduction of 125% to 200% for payments made to prescribed

entities carrying out R&D in India.
 A deduction of R&D employee salary and materials consumed within 3

years immediately preceding the commencement of the business.
 There is no cap on the R&D benefits available in India. R&D activities must
be conducted in India. There is no location restriction with respect to IP.

 Multiplier Grants Scheme (MGS): encourages collaborative R&D between

industry and academics/ R&D institutions for development of products
and packages and bridge the gap between R&D and commercialization.
 Scheme for expansion of PhD in Electronics sector: A scheme to enhance

the number of PhDs in Electronics sector to 1500 per annum by 2017-18
has been approved by the Govt.
 Technological Incubation and Development of Entrepreneurs (TIDE): to

assist Institutions of Higher learning to strengthen their Technology
Incubation Centers and thus enable young entrepreneurs to initiate
technology start up companies for commercial exploitation of
technologies developed by them.

 India seen as a secure place for IPR protection

 Over 80% of the total patents in force in India belong to foreign companies.
 Around 40,000 patents are annually filed, currently in India
 Number of patents are estimated to grow to 150,000 filings per year by 2020
 Support International Patent Protection in Electronics & IT (SIP-EIT) Scheme:
DeitY provides financial support to MSMEs & start-up technology companies when
filing international patents in Electronics & ICT space. Govt. reimburses up to 50%
of total patent processing costs.

Electronics?
Think India !
For policy details about MSIPS, EMC, State Policies et al
please visit
www.deity.gov.in/electronicsindia
Email: kapildsharma@yahoo.com
Mobile: +91 97166 44444
Twitter: @kapildsharma

Electronics Policies For MSME

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Electronics Policies For MSME

Hochgeladen von

Copyright:

Verfügbare Formate

The New Sunrise

Opportunities in the growing

Kapil Sharma, Senior Consultant, DeitY

Year Values in US$ Billion

Kapil Sharma, Senior Consultant, DeitY

48 Mn SMEs growing @ 4.5% 51% Investment Decline through PE Route

Kapil Sharma, Senior Consultant, DeitY

Kapil Sharma, Senior Consultant, DeitY

National Policy on Electronics

“To create a globally competitive electronics design and

Investment : US$ 100 Billion

Kapil Sharma, Senior Consultant, DeitY

Over 50 Strategies specified in NPE

Kapil Sharma, Senior Consultant, DeitY

 To introduce Modified Special Incentive Package scheme by providing capital grant

 To set up a dedicated “Electronic Development Fund” for promotion of innovation,

 To provide Preferential Access to Indian electronics products/ manufactured-in-

 To set up of a National Electronics Mission (NEM)

Kapil Sharma, Senior Consultant, DeitY

 Substantial CAPEX Subsidy

 Reimbursement of CVD/ Excise for

 Reimbursement of Central taxes

Subsidy of 20%-25%  Scheme in force till 26th July 2015

Kapil Sharma, Senior Consultant, DeitY

Investment Allowance under Section 32AC

 Investment Allowance @15% to a

 Benefit available for 3 years i.e. for

Kapil Sharma, Senior Consultant, DeitY

 SAD exempted on import of inputs/components used in the manufacture of

World Class Infrastructure

 Open for application till 2017

Kapil Sharma, Senior Consultant, DeitY

# Chief Location Proposed Financial

Kapil Sharma, Senior Consultant, DeitY

 Two Semiconductor FABs

Kapil Sharma, Senior Consultant, DeitY

List of notified items

 Extent of Government procurement from

 23 Telecom Products  Applicable to both Indian Cos. & MNCs

Kapil Sharma, Senior Consultant, DeitY

Export Incentives on FOB

Around 117 Electronic

# EDFs under Approval

 Walden India Fund  Fund to promote Innovation, IP Generation,

Kapil Sharma, Senior Consultant, DeitY

 Electronic Game (Video)

Kapil Sharma, Senior Consultant, DeitY

Skill Development Scheme

 Vocational courses based on

Kapil Sharma, Senior Consultant, DeitY

Kapil Sharma, Senior Consultant, DeitY

 To recognize and motivate

Kapil Sharma, Senior Consultant, DeitY

Purpose: Total Grant Available:

Grant – In - Aid  The total reimbursement for one

 The Total Reimbursement available

Kapil Sharma, Senior Consultant, DeitY

Purpose: Total Grant Available:

Grant – In – Aid to comply with  The total reimbursement under the

Kapil Sharma, Senior Consultant, DeitY

Purpose: Total Grant Available:

Kapil Sharma, Senior Consultant, DeitY