PLI Scheme for Electronics Manufacturing
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Production Linked Incentive (PLI) Scheme for Electronics Manufacturing
The Production Linked Incentive (PLI) Scheme for Electronics Manufacturing is an initiative by the Government of India to make the country a manufacturing hub of electronics. The PLI Scheme for Electronics Manufacturing was launched under the National Policy on Electronics, 2019 that offers financial reimbursement to electronic products manufacturers based on their turnover and performance. The PLI Scheme for Electronics Manufacturing has been initiated to encourage domestic manufacturing of mobile phones and electronics components, to reduce dependency on imports, encourage large investments, and enhance the electronics value chain of India. Further, the PLI Scheme for Electronics Manufacturing targets the creation of employment opportunities in the electronics sector, boosting exports, and raising the level of Indian content in electronics.
What is the PLI Scheme for Electronics Manufacturing?
The Production Linked Incentive (PLI) Scheme for Electronics Manufacturing is a governmental policy to encourage large scale manufacturers of mobile phone and electronic parts. The PLI Scheme for Electronics Manufacturing provides funding and rewards for performance to the manufacturers for enhancing their capacity to produce products within the domestic market of India. The main aim of the PLI Scheme for Electronics Manufacturing is to promote the development of the domestic electronics manufacturing sector, reduce import dependence on electronics, and acquire considerable investments in the electronics industry value chain. The PLI Scheme for Electronics Manufacturing seeks to increase the committed value played by electronics manufacturing in the nation while making it a global contender.
Benefits of PLI Scheme for Electronics Manufacturing
The PLI Scheme for Electronics Manufacturing provides multiple benefits to the manufacturers and electronics sector of India, such as:
- Attract Investments: The PLI Scheme for Electronics Manufacturing enhances the electronics sector and attracts local and national investments as well as Foreign Direct Investment (FDI) in the electronics sector.
- Promote Domestic Manufacturing: The PLI Scheme for Electronics Manufacturing incentivizes production and reduces reliance on imported electronics and components.
- Job Creation: PLI Scheme for Electronics Manufacturing leads to expansion of manufacturing facilities which creates jobs at large scale within the electronics sector and related industries.
- Economic Growth: PLI Scheme for Electronics Manufacturing assists in the growth of the electronics manufacturing sector which results in the overall economic development.
- Development of Infrastructure: The PLI Scheme for Electronics Manufacturing assists in the improvement of the manufacturing ecosystem and improves infrastructure, including industrial parks, logistics and power supply.
Eligibility for PLI Scheme for Electronics Manufacturing
Listed below are the eligibility criteria for the PLI Scheme for Electronics Manufacturing that the manufacturers must fulfill.
- Each application is limited to one of the target segments.
- Eligibility is subject to thresholds of incremental investment and incremental sales of manufactured goods (as distinct from traded goods).
- Eligibility under Production Linked Incentive (PLI) scheme should not affect eligibility under any other Scheme and vice-versa.
Eligibility Threshold Criteria
An applicant is required to meet all the threshold conditions to be eligible for disbursement of the PLI Scheme for Electronics Manufacturing and the eligibility threshold criteria is tabulated below.
| Segment | Proposed Incentive Rate | Incremental Investment over Base Year | Incremental Sales of Manufactured Goods over Base Year |
|---|---|---|---|
| Mobile Phones (Invoice value of Rs 15,000 and above) |
Year 1: 6% Year 2: 6% Year 3: 5% Year 4: 5% Year 5: 4% |
Rs 1,000 Crore over 4 Years Cumulative Minimum (Crore): Year 1: 250 Year 2: 500 Year 3: 750 Year 4: 1,000 |
Year 1: Rs 4,000 Crore Year 2: Rs 8,000 Crore Year 3: Rs 15,000 Crore Year 4: Rs 20,000 Crore Year 5: Rs 25,000 Crore |
| Mobile Phones (Domestic Companies) | Rs 200 Crore over 4 Years Cumulative Minimum (Crore): Year 1: 50 Year 2: 100 Year 3: 150 Year 4: 200 |
Year 1: Rs 500 Crore Year 2: Rs 1,000 Crore Year 3: Rs 2,000 Crore Year 4: Rs 3,500 Crore Year 5: Rs 5,000 Crore |
|
| Specified Electronic Components | Rs 100 Crore over 4 Years Cumulative Minimum (Crore): Year 1: 25 Year 2: 50 Year 3: 75 Year 4: 100 |
Year 1: Rs 100 Crore Year 2: Rs 200 Crore Year 3: Rs 300 Crore Year 4: Rs 450 Crore Year 5: Rs 600 Crore |
Specified Electronic Components eligible under PLI Scheme for Electronics Manufacturing
Tabulated below is the list of specified electronic components that are eligible under the PLI Scheme for Electronics Manufacturing.
| S. No. | Description of Goods |
|---|---|
| 1 | SMT components |
| 2 | Discrete semiconductor devices including transistors, diodes, thyristors, etc. |
| 3 | Passive components including resistors, capacitors, etc. for electronic applications |
| 4 | Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks |
| 5 | Sensors, transducers, actuators, crystals for electronic applications |
| 6 | System in Package (SIP) |
| 7 | Micro / Nano-electronic components such as Micro Electromechanical Systems (MEMS) and Nano Electromechanical Systems (NEMS) |
| 8 | Assembly, Testing, Marking and Packaging (ATMP) units |
Approval and Disbursement Process for PLI Scheme for Electronics Manufacturing
Listed below is the approval and disbursement process for the PLI Scheme for Electronics Manufacturing.
- Application for PLI Scheme for Electronics Manufacturing can be made by any company that is registered in India.
- An initial application is to be submitted before the due date should be completed with all aspects.
- An acknowledgement will be issued after initial review of the application; the acknowledgement should not be analyzed for approval under the PLI Scheme.
- Eligible applications will be reviewed and evaluated continuously and assessed for approval.
- Incentive is released for eligible applicants that meet the required thresholds and are found to have disbursement claims in order.
- The PLI Scheme for Electronics Manufacturing will be provided to the applicants for a tenure of five years after a base year.
Note: The PLI Scheme for Electronics Manufacturing was notified on April 4, 2020. The PLI Guidelines were released on June 6, 2020. Incentives under the PLI Scheme are applicable from August 1, 2020.
Conclusion
The Production Linked Incentive (PLI) Scheme for Electronics Manufacturing focuses on enhancing the potentiality of the country as a preferred destination for electronics manufacturing. The PLI Scheme for Electronics Manufacturing pays incentives on the local manufacturing of mobile phones and electronic parts so that the importation of mobile phones and related electronic products drops substantially. The PLI Scheme for Electronics Manufacturing strategic development not only encourages large scale inward investment, but also gives focus to economic growth, employment generation and infrastructural development; making India an integral part of the global electronics value system. In conclusion, the PLI Scheme for Electronics Manufacturing helps in building up the EMS in India deeply, as well as helping the nation to become more competitive internationally and work towards the Atma Nirbhar Bharat in the electronics manufacturing sector.
Frequently Asked Questions
What is the objective of the PLI Scheme for Electronics Manufacturing?
The PLI Scheme for Electronics Manufacturing aims to boost domestic value addition, reduce imports of electronic products, increase exports and generate job opportunities at large scale in the electronics sector.
What is the PLI Scheme for Electronics Manufacturing?
The PLI Scheme for Electronics Manufacturing promotes India’s position globally for electronics production by providing financial incentives to manufacturers to increase the domestic production of electronics and reduce imports from foreign countries.
What are the benefits of the PLI Scheme for Electronics Manufacturing?
The PLI Scheme for Electronics Manufacturing provides several benefits such as attracting investments, boosting domestic manufacturing, increasing exports, generating jobs, supporting economic development and improving infrastructure.
Who is eligible for the PLI Scheme for Electronics Manufacturing?
Companies that are registered in India and fulfill the required eligibility thresholds for incremental investments and sales in target segments, such as mobile and electronic components, are eligible to apply for the PLI Scheme.
PLI Scheme for Other Sectors
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