July, 2013

IESA Members Meeting

Electronics The Sunrise Sector of India

Agenda

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Support from Government of India

Support from Government of Karnataka

Identifying the needs of the stakeholders

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Support from Government of India

Support from Government of Karnataka

Identifying the needs of the stakeholders

Policy support – National Policy on Electronics 2012

Objective: Transforming India into a premier ESDM hub

Few Components:

Electronics Manufacturing Cluster Scheme (EMC)

Modified Special Incentive Package Scheme (M-SIPS)

Human Resource Development

Setting up of Semi conductor Fab in India (proposed)

Electronics Development Fund (EDF) (proposed)

Public focus on electronics is evident in the renaming of

Dept. of Information Technology into Dept. Of Electronics &

Information Technology (Deity)

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Electronic Manufacturing Cluster (EMC) Scheme

Open for Greenfield & Brownfield EMCs

Focus on Infrastructure development/up gradation

Providing common facilities for ESDM units

Implementation through SPV

Option to use Information Technology Investment Regions (ITIRs) infrastructure

Scheme open till October 2017

National Manufacturing Policy applicable to Greenfield EMCs falling within NIMZ

Operation & Maintenance by SPV through user charges

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Electronic Manufacturing Cluster (EMC) Scheme Financial Assistance

As grant-in-aid to SPV

Greenfield: 50% of project cost, subject to a ceiling of Rs 50 Cr for every 100 acres of land; Minimum industry contribution:25%

Brownfield: 75% of project cost, subject to a ceiling of Rs 50 Cr; Minimum industry contribution-15%

Admin expenses ≤3% of Central Assistance

Expenses towards DPR part of project cost

20% of Govt. contribution released after project sanction; subsequent release on basis of UC

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Electronic Manufacturing Cluster (EMC) Scheme Financial Assistance

Basic Development Boundry, land development, internal roads, storm water drains, street

lighting

Essential Services Water and sewage treatment plant, Waste disposal system,

Electrification infrastructure, Warehousing

Employee Welfare Services Food courts, Hostel, Recreational facility, Educational facilities, Creche

Support Services CoE, Training Facility, Conference facility, IT & Telecom infrastructure

Manufacturing Support (-Land & Factory Building) Tool room, CAD/CAM centre, Plastic molding, sheet metal stamping,

Packaging, Testing facilities

Common Amenities Statutory compliance administrative offices

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Process of applying under EMC

Stage 1

• In-principle approval from DeITY • Application by Chief Promoter or SPV/Chief Promoter • Submission of Preliminary Information Memorandum

Stage 2

• Preparing & Submission of final application • Procurement of Land • Achieving Financial Closure • Submission of final application with DPR

Stage 3

• Approval of Application & Release of first tranche • Recommendation and approval by DeITY by SCC • Meeting of pre disbursement conditions, if any • Initial Central Government contribution of@20% to be released

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Modified Special Incentive Package Scheme (M-SIPS)

Incentives available for units set up within notified EMCs Incentive in SEZ zones: 20% of CAPEX*

Incentive in Non SEZ zones: 25% of CAPEX + Reimbursement of Taxes*

CAPEX include land, building, P&M, R&D

Land cost up to 2% of capital expenditure considered for calculating incentives

Different investment thresholds for different unit categories

Incentive against CAPEX released after total investment exceeds threshold value

Incentive restricted to first 10 years from date of approval

Applicable to Investments in New ESDM units

Expansion of existing ESDM units (expansion implies value of fixed capital investment in P&M of an ESDM unit > 25%)

*As Applicable 9

ESDM verticals eligible under M-SIPS

Intermediates Nano Electronic components Semiconductor wafering Semiconductor chips Assembly, Testing, Marking & Packaging of ESDM units Chip Components Discrete semiconductors like transistors , Diodes Power Semiconductors Electrochemical Components & Mechanical Parts Consumables & Accessories FABs for ESDM products

Electronic Products Nano Electronics Telecom IT Hardware Consumer Electronics Health & Medical Electronics Strategic Electronics Solar Photo Voltaic LEDs LCDs Avionics Industrial Electronics Automotive Electronics Agri -Electronics Opto Electronics E-Waste Processing/recylcing Bio-Metrics and identity devices Power suppliers for ESDM products

Electronic Manufacturing Services

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Process of applying under M-SIPS

Stage 1

• Submission of Initial Application includes • Financial Closure • Non-refundable Initial Application fee

Stage 2

• Approval of Application • Appraisal by Appraisal Committee • Technology evaluation by Technical Evaluation Committee • Application approval by Competent Authority • DeITY communicates project approval

•Project Implementation & Disbursement of Incentives post application approval •For calculation of incentives, investments to be made after the project is approved. •Only investment in land can be made up to 6 months before the date of approval •Guidelines for fund disbursement yet to be issued

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Support from Government of India

Support from Government of Karnataka

Identifying the needs of the stakeholders

Karnataka ESDM Policy 2013

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• Preferential Market Access Policy

• Setting up of ESDM Innovation Centers

• Semiconductor IP & Fables Chip Design Fund

• Establishing “Brand Karnataka” for ESDM globally

• Innovation Promotion & R&D Grant

• Incentives for Patents & IPR

• Marketing Incentives for prticipating in International Market

• Export Incentives & Deemed Export Incentives

• Incentives for Capital Investment in ESDM Sector

Electronic Manufacturing

Clusters

• State to promote high class ESDM cluster by providing additional incentives

• State will support 7 such clusters • Support 20% of total infrastructure cost

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Support from Government of India

Support from Government of Karnataka

Identifying the needs of the stakeholders

Common Facilities in Indian Scenario - Few suggestions

Manufacturing & Testing Common Hi-Tech Production

Machinery Research & Development

Centre Testing Labs Integrated Logistic system Training Centre E-waste management

Additional Common Amenities Warehouse Conference & Exhibition Centre Guest House Facilities Housing Facilities Crèche Facility

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Thank You

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