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Production Linked Incentive – Ministry of Electronics and Information Technology

Ministry of Electronics and Information Technology on 01.04.2020 has come up with a scheme for Large scale electronics manufacturing in India in the form of financial assistance to boost domestic manufacturing and attract large investments in the electronics value chain including electronics components and semiconductor packing. The features of scheme are as under:

  • Companies eligible for scheme: Who are engaged in manufacturing in India of mobile phones or specified electronic components (including, SMT Components, Discrete semiconductor devices etc.) and they meet the investment and incremental sale over base year criteria. (Eligibility criteria has been defined below).

Note: Contract manufacturers are also eligible for the scheme.

  • Quantum of Incentive:
    • 4% to 6% on incremental sales (over base year i.e. F.Y. 2019-20) of goods manufactured in India and covered under target segments;
    • Subject to maximum ceiling amount per Company as prescribed by Empowered Committee
    • Incentive will be given on pro-rata basis from the date of filing application to avail the scheme.
  • Tenure of Incentive: 5 Years subsequent to base year
  • Process of claiming Incentive:
    • Each application shall be limited to one of the target segments.
    • It should be submitted before due date. Application to avail scheme may be applied within 4 months. This time may be extended by Govt.
    • Incentives under this scheme will be applicable from 01.08.2020.
Proposed Incentive of Incremental SalesSegmentIncremental Investment over Base YearIncremental Sales of Manufactured Goods over Base Year
Year 1: 6%
Year 2: 6%
Year 3: 5%
Year 4: 5%
Year 5: 4%		Mobile Phones segments (Invoice value of INR 15,000 and above)INR 1,000 Crore over 4 YearsINR 25,000 Crore over 5 Years
Mobile Phones (Domestic Companies which is owned by Indian Resident having more than 50% ownership)INR 200 Crore over 4 YearsINR 5,000 Crore over 5 Years
Specified Electronic Components as per Annexure B, like of SMT components, Printed Circuit Boards (PCB), System in Package (SIP) etcINR 100 Crore over 4 YearsINR 600 Crore over 5 Years

Source: Notification issued by Ministry of Electronics and Information Technology on 01.04.2020.

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