Trade Update 15

Foreign Trade Update

A. Cabinet approves Production Linked Incentive Scheme for Large Scale Electronics Manufacturing
The Production Incentive Scheme for Large Scale Electronics Manufacturing has been now approved by the Cabinet. This is in view of the fact that the production of mobile phones in the country has gone up significantly from around INR 18,900 crore (USD 3 Billion) in 2014-15 to INR 1,70,000 crore (USD 24 Billion) in 2018-19 and the domestic demand is almost completely being met out of domestic production. By integrating “Assemble in India for the world” into “Make in India”, India can further significantly increase manufacturing output.

The following are the details of the Scheme:
• The Scheme proposes production linked incentives to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components including Assembly, Testing, Marking and Packaging (ATMP) units.
• The Scheme shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year as defined.
• The proposed Scheme is likely to benefit 5-6 major global players and few domestic champions, in the field of mobile manufacturing and Specified Electronics Components and bring in large scale electronics manufacturing in India.
• The total cost of the proposed Scheme is approximately INR 40,995 crore (Rupees Forty Thousand Nine Hundred and Ninety-Five Crore Only) which includes an incentive outlay of approximately INR 40,951 crore (Rupees Forty Thousand Nine Hundred and Fifty-one Crore Only) and administrative expenses to the tune of INR 44 crore (Rupees Forty-Four Crore Only).
• The Scheme will result in a direct employment generation potential of over 2,00,000 jobs over 5 years. Indirect employment will be about 3 times of direct employment as per industry estimates. Thus, total employment potential of the Scheme is approximately 8,00,000.