ESDM industry body hails Budget sops worth Rs 15,500 cr

Allocation of incentives totaling Rs 4,203 crore for the establishment of assembly, test, and packaging plants will encourage more investments in this important segment of the semiconductor value chain, bolstering domestic manufacturing capabilities - Amrit Manwani, CMD, Sahasra Group

Vijayawada: Electronics System Design and Manufacturing (ESDM) industry has lauded substantial allocations for electronics manufacturing initiatives amounting to Rs 15,500 crore for key domains.

The Electronics Industries Association of India (ELCINA) applauded the steps announced by the Union Government for bolstering the ESDM sector, as unveiled in the interim Budget 2024-25. One of the key concerns of electronics manufacturers was addressed through extension of key customs notifications up to September 30, 2024 vide Notif No. 07/2024-Customs dated 29th Jan’24. These are standalone Customs Notifications 25/98, 25/99, and 25/2002, covering semiconductors, raw materials, and capital equipment.

Additionally, Notification No. 06/2024-Customs, dated 29th Jan’24 extends conditional exemptions or concessional BCD rates under a customs notification fostering a favourable environment for continued growth and innovation. This impacts large number of items of ESDM sector viz mobile supply chain, solar, materials and more.

ELCINA acknowledged this commitment to sustaining momentum in electronics manufacturing. Atul Lall, president ELCINA and Vice Chairman and CEO, Dixon Technologies stated “we appreciate the strong support from MeitY and Finance Ministry for favourably considering ELCINA’s recommendations. This will ensure continuity of the current policy and further catalyse growth of the industry. We are encouraged by these steps and ELCINA looks forward to a bold policy for strengthening the components eco-system in India and atleast doubling value addition over next three to four years,” he opined. This includes allocation of Rs 6,903 crore for various semiconductor projects further demonstrating the government’s commitment.

Appreciating the move, Amrit Manwani, past president ELCINA and CMD, Sahasra Group, said “the allocation of incentives totaling Rs 4,203 crore for the establishment of assembly, test, and packaging plants is a strategic move and will encourage more investments in this important segment of the semiconductor value chain, bolstering domestic manufacturing capabilities.”

The strategic investment includes robust support for the semiconductor mission and the Production-Linked Incentive (PLI) scheme for mobile and IT hardware. ELCINA says

these initiatives will catalyse innovation, create employment, and enhance the competitiveness of the Indian electronics industry globally.

Further, ELCINA notes with satisfaction the significant fillip to the mobile PLI scheme, with a higher allocation of Rs 6,125 crore, up from Rs 4,489 crore in the previous year. This sector is growing rapidly and this step will continue and further accelerate growth of mobile manufacturing. However, ELCINA recommends, that equal attention must be given to mobile component manufacturing which remains a challenge.

It is noted that a smaller allocation of Rs 75 crore has been made for IT hardware PLI scheme and hopefully this will be increased in due course as manufacturing expands. The other longstanding electronics hardware manufacturing schemes have been allocated Rs 750 crore as an interim amount.

The proposed Rs 1 lakh crore corpus for Innovation and research, is an initiative which will spawn new projects and technologies in deep tech areas, specially electronics, semiconductors and components research. This is a visionary step and with diligent implementation, can support the creation of a thriving and innovative ESDM sector. The government’s announcement of an outlay of Rs 4,795.24 crore for the Digital India

programme, ensuring universal access to high-speed internet and digital literacy initiatives, will continue to establish India’s leadership in this area which is a vital pillar for inclusive growth and digital transformation of the nation. Rajoo Goel, Secretary General stated that “the substantial allotment of Rs 15,000 crore for various manufacturing schemes is poised to inject significant momentum into the industry. ELCINA recognizes the potential of the increased allocation for the Modified Programme for Development of Semiconductors and display manufacturing ecosystem. We now need to propel the electronic components and materials industry in the country which is critical for a resilient and sustainable ESDM sector.”

ELCINA commends these proactive measures by the government, recognising their potential to usher in a new era of growth, innovation, and global competitiveness in the Indian ESDM sector. However, heightened expectations surround the full budget post general elections, with anticipation for additional measures aimed at catalyzing the growth of the ESDM sector.