Updated on May 06, 2025 02:36:56 PM
In the age of attempting perfection while producing goods at large volume, the replacement of manual tasks has taken place by electronic systems profusely. This sort of development not only improves the scale of productivity but also makes the ample time to infuse into new innovative models that can have the ability to break the prudent concept of yielding maximum profit return in an efficient way.
What Data Says?
The share of electronic systems in GDP of India has reached 30% in the year 2022, which is currently valued at $155 Bn with the domestic production for 65% in the Indian electronic market. The surging sector is propelling entrepreneurs' growth by providing them with a root level of planning propagation of government of India initiatives such as ‘Make In India’ and ‘Digital India’. The continuous monitoring and follow-ups taken by the government helps industry to boom in the country.
India, being the third largest startup ecosystem in the world, stimulates the drive towards making the global hub for ESDM (Electronic System For Design and Manufacturing) includes wholesome schemes such as PLI (Productive Linked Incentive) for large electronics components, Modified Electronics Manufacturing Clusters Schemes (EMC 2.0), PLI for IT hardware, Schemes for Promotion of Manufacturing Electronic Components and Semiconductors (SPECS) have been initiated to foster the values of expanding growth in the Indian economy.
To strengthen the resilient global supply chain in the world, the Semicon India Program has launched the outlay incentive of $10 Bn to spread the sustaining web of semiconductor and display ecosystems in the country.
The share of semiconductors market has sought to target over US$ 110 Bn by 2030 while the display market has made a goal to reach around US$ 15 Bn by the year 2025 whereby two third of the semiconductor market is occupied by telecom stack and industrial applications. In order to evolve the semiconductors industry in India, the government has revamped to increase the wider networking of the semiconductor market by initiating the Talent Development Program by encouraging 85,000 semiconductors engineers.
While the electronic components market is continuously occupying its significant portion due to rising demand in consumer’s disposable incomes. India, being a young pool of talent, provides the competitive advantage in terms of workforce availability at cheap rates. The worth for domestic production of electronic components stood at US$ 9.9 Bn alone by contributing over US$ 14.6 Bn in exporting electronic goods.
For the Participation!
To participate in FDI in the electronic systems, applicants are required to register under the Foreign Investment Facilitation Portal (FIFP). The procedure can be puzzling for any newcomer applicant since it incorporates several terms and conditions without rendering direct access to portals that can generate approvals for FDI.
Table of Content
Following are the related objectives of FDI in electronic systems sector which are follows:
100% FDI is allowed under the automatic route. In the case of defense electronics, FDI up to 49% is allowed through automatic route and beyond 49% requires government approval.
Many documents are required for FDI in electronic systems which are as follows:
Following are the procedures which required at the time of FDI in the electronic systems sector:
Applicants must fill out the online application form along with the relevant documents for making out the proposal for Foreign Direct Investment
Filing the proposal for FDI online within two working days, DIPP then will address the concerned administrative ministry to transfer the proposal of applicants electronically.
Collect all the requisite documents for continuing the process of the investment proposal. In case documents may be found incorrect, applicants will be held responsible in case of any deviation found.
The DIPP along with potential authorities will process the application internally and recognize various ministries for adding several comments such as the Ministry of Home Affairs, Reserve Bank of India, Ministry of External Affairs, Ministry Of Finances, etc.
The key advantages for investor under electronics systems in FDI has been mentioned below:
The benefits of FDI in electronic systems are as follows:
FDI in the electronic systems sector is enforced to bring advanced technologies, knowledge and expertise in every sector indirectly, whether it is agricultural or chemical industry. There are various schemes which bring together local workers and expertise in contact with international engineering solutions. Behind the successive growth of the electronic industry to awaken the potential of industry is the ‘Digital India Campaign’ initiated by the government of India. There are various other schemes, reforms and initiatives which continuously monitor to enhance the performance of startup technological revolution in India.
Several other factors to consider for investors while Education Sector are listed below:
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions
There are different types of FDI in electronic systems which includes– Mergers and Acquisitions, Greenfield Investment and joint ventures.
The current level of FDI allowed in the electronic systems is 100% under automatic route. However, defense equipment is allowed only 49% under automatic route and beyond 49% approval under government route globally.
Global trends in foreign direct investment (FDI) in electronic systems include rising FDI in emerging economies, a rise in cross-border partnerships and acquisitions, and an emphasis on cutting-edge technologies like 5G telecommunications, artificial intelligence, and the Internet of Things (IoT).
The duration of SPECS schemes is open from the date of receiving the application for a period of 3 years. After 3 years of validation, no further passing of documents shall be considered for approval.
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