AP home to over 20% electronics manufacturers in India: APEITA

How the State government is attracting the electronics manufacturing companies?

Electronic components manufacturing sector has a cut-throat competition between countries, not just States. India has to compete with the giants like Taiwan and Korea. The domestic manufacturing of electronic components is much cheaper than importing them from the foreign countries.

The State government is trying to establish electronic manufacturing infrastructures from scratch. The government's skilling programmes at village level helped youth to get jobs in the assembling units of the electronics manufacturing clusters (EMCs). The State has dedicated clusters for Japanese, Korean and Taiwanese electronics manufacturing firms.

What advantages are being offered to the electronics manufacturing units in the State?

AP is the only State to have four world class EMCs - EMC 1 and 2 at Tirupati, EMC in Sri City and YSR EMC at Kopparthi, near Kadapa. The state has six major ports and six airports, out of which three are international. These advantages will bring down the logistic costs drastically for the companies in AP when compared to any other State in India. Besides geographical and infrastructural advantages, AP offers several benefits to the electronics manufacturing sector. The State ranked first in ease of doing business for three years in a row. The single window clearances for industries and skilling initiatives have resulted in attracting a bunch of manufacturing units to the State.

AP ranks fifth in employability in the country as per India Skills Report 2021. Round-the-clock power and continuous water supply from water sources nearby the industrial parks also enabled more companies to setup their base here. AP is home to more than 20 per cent of electronics manufacturers in India. One mobile is manufactured every second in the State.

Could you reveal more updates about the EMCs in AP?

The EMCs in AP are strategically located along major industrial corridors. They provide world-class connectivity to major ports (Krishnapatnam and Chennai) and airports (Tirupati, Chennai and Bengaluru), and proximity to large domestic consumption centers across Bengaluru, Chennai and Hyderabad.

The EMC at Sri City is already a favourite destination for global electronics manufacturing companies, with its proximity to Chennai and Krishnapatanam Ports coupled with excellent infrastructure. EMC 1 and 2 at Tirupati have also emerged as an important electronics manufacturing hub since 2018.

The homegrown electronics manufacturing services (EMS) company Dixon is expanding their operations from Tirupati, which is a hot destination for Taiwanese and Chinese investments in India. Television panel manufacturer TCL, world's number 1 original design manufacturer Wingtech and Israel-based NeoLyncs also have their presence here.

YSR EMC at Kopparthi is the first EMC in India sanctioned under EMC 2.0 scheme. The State government aims to attract Rs10,000-crore investments at Kopparthi EMC and create 30,000 jobs here. Till now, five electronics manufacturing companies committed to invest about Rs 603 crore here and provide employment to around 7,391 persons.

What are the current developments taking place at Kopparthi EMC?

Kopparthi EMC is strategically located adjacent to mega industrial hub, and most importantly close to consumption centers like Chennai and Bengaluru and Hyderabad. It offers a combination of fastest production timelines and cheapest production costs. Out of the total 540-acre developed land, about 300-acre is immediately available here.

The five electronics manufacturing companies – AIL Dixon Technologies, Digicon Solutions LLP (JV of Karbonn, Celkon and Resolute), Celkon Resolute Electronics LLP (JV of Celkon and Resolute), Chandrahas Enterprises and UTNPL (JV of Karbonn and Neolync) – are allotted 50 acre at Kopparthi EMC. From June 2022, some of these companies will start their operations.

Having two manufacturing facilities at Sriperumbudur (Tamil Nadu) and one at Sri City, Taiwanese electronics manufacturer Foxconn plans to establish its unit in 75-acre-land at Kopparthi over the next three months. Also, Global product engineering company BlackPepper Technologies, which has a plant in Sri City, proposed to set up two units in 20-acre land here.

Harmony City (UTL Group) has proposed to invest Rs 1,800 crore to develop social infrastructure here and create 500 jobs. In the coming six months, the State government will sign memorandum of understanding (MoU) with more companies to further create 7,000 -10,000 jobs. A majority of workforce will be from this State only.

About 104.67-acre land is being developed at Kopparthi as part of the Micro and Small Enterprises (MSME) Cluster Development Park, with a project cost of Rs 22.03 crore. The Ministry of Electronics and Information Technology (MeitY) has granted Rs 350 crore, while the State government will spend Rs 368 crore for the development of EMC at Kopparthi.

How the electronics manufacturing firms are getting benefitted by the PLI scheme?

The State government gives 100 per cent incentive to the manufacturing units through the Production Linked Incentive (PLI) scheme, dovetailing into the Centre's PLI scheme. The incentive installment would be disbursed after firm has been in production for at least one financial year.

The incentive rate is up to 5 per cent on incremental sales over base year. In addition to the PLI incentive, investors can also choose incentives under the operational expenses. The EMC at Kopparthi has come up with a tailor-made incentive package for mega projects with an investment of over Rs 500 crore or employment to more than 4,000 persons.

How the state government is supporting the startups and MSMEs in this sector?

The State government has been supporting the startups and MSMEs in numerous ways. It has kept aside a venture fund of Rs100 crore for the startups. The State has several incubation centres that have a mentor pool, testing labs and enough built-up co-working space for the startups. Apart from these, two centres of excellence are also available in Visakhapatnam.

AP government is the biggest service provider and the largest spending entity to offer services to the people, when compared to any other organisation in the State. AP Technology Services (APTS) is willing to sign an MoU with any tech or electronics startup, which has a way of solving various problems of the public.

While focusing on new investments, we have recently tried to explore the opportunities at the Indian Navy. We are shocked to know that 90 per cent of their components are being imported from abroad, whereas at least 60 per cent can be manufactured at the local MSMEs. We are trying to support the MSMEs by connecting them to such organisations.