PLI Scheme: India Invites Applications for Second Round of Large-Scale Electronics Manufacturing
The government has started inviting applications for the second round of large-scale electronics manufacturing under the production-linked incentive scheme with focus on some electronic components like motherboards, semiconductor devices, among others. Application window for the scheme will remain open till March 31 which may be further extended, according to guidelines issued by the Ministry of Electronics and IT. “The second round of the PLI scheme is open for accepting applications,” an official memorandum dated March 11 said. “The tenure of the second round of PLI scheme is for four years and the incentive shall be applicable from April 1, 2021.” The first round of the scheme was open for receiving applications till July 31 which attracted participation from global majors like Apple’s contract manufacturers Foxconn, Wistron and Pegatron; Samsung; local players Lava, Optiemus, Dixon etc.—committing investment of over Rs 11,000 crore. While the first round targeted mobile manufacturing with incentives for 20 companies, the second round has expanded the window for up to 30 eligible companies.
(BloomberQuint, Mar 14, 2021)
India's draft e-commerce policy calls for equal treatment of sellers
India will require e-commerce firms to treat sellers equally on their platforms and ensure transparency, according to a draft policy seen by Reuters on Saturday that follows criticism against business practices of big online companies. India has been deliberating a new e-commerce policy for months amid complaints from brick-and-mortar retailers who allege online giants like Amazon and Walmart's Flipkart flout federal regulations. The companies have denied the allegations. A Reuters special report last month revealed that Amazon has for years given preferential treatment to a small group of sellers on its India platform and used them to circumvent the country's foreign investment rules. The latest draft of the policy document says operators should be impartial in their dealings with sellers. "E-commerce operators must ensure equal treatment of all sellers/vendors registered on their platforms and not adopt algorithms which result in prioritizing select vendors/sellers," it says. A spokesman for the commerce ministry declined to comment. The policy will apply to Amazon and Flipkart - two top e-commerce players in India - as well as domestic players like Reliance Industries, which has plans to expand its JioMart online platform. All three firms did not immediately respond to a request for comment.
(ET, Mar 14, 2021)
Twitter India Looks For Law Enforcement Liaison As Govt. Clears Air On IT Rules
Minister of electronics and information technology Ravi Shankar Prasad has clarified that the Indian government does not intend to interfere in the activities of social media platforms like Facebook, Twitter and others. This at a time when Twitter India has put out a job posting looking for an executive to liaison with law enforcement agencies, or a law enforcement (LE) outreach manager. The IT minister’s statement comes in the backdrop of India’s latest IT (Intermediary Guidelines and Digital Media Ethics Code) Rules of 2021, which states due diligence, grievance redressal and self-regulation for news portals, social media and over-the-top (OTT) platforms.The government will soon constitute an inter-departmental committee (IDC) consisting of representatives from various ministries, to look into complaints regarding the online content of these digital media intermediaries. The minister referred to these guidelines as a “soft-touch oversight mechanism” to prevent “abuse” and misuse” of digital intermediaries and social media platforms. The union minister, in an interview with ET, said that the government would not want to look at the content or seek decryption of messages, but only to trace the origin of a message that caused serious criminal offences. He was referring to the traceability clause that mandates messaging platforms to report to the government within 72 hours on the origin of messages that lead to offences that are serious in nature. Prasad added that the government will follow due legal procedures and seek the court’s orders or law enforcement agency’s permission before submitting such requests.
(INC42, Mar 08, 2021)
Telecom and networking equipment PLI norms finalised for cabinet approval
The government has finalised the norms for Production Linked Incentive (PLI) scheme for the telecom and networking equipment for the cabinet’s approval, sources informed CNBC TV-18.
The product categories will be divided into five, sources said. The types of equipment for the PLI scheme will include core transmission equipment, 4G/5G next-generation radio network, wireless equipment, access & customer premises equipment amongst others. The PLI benefits include 7 percent for MSME companies per year on eligible incremental sales for the 5 years period. Similarly, Non-MSME companies will be eligible for a 6 percent incentive in the first and second year, 5 percent in the third and fourth year, and 4 percent in the fifth year.
The annual incremental sales will be calculated over the base year of FY20. The amount of the incentive will be capped and the scheme will be implemented through a project management agency. The PLI conditions will include criteria of a minimum threshold of cumulative incremental investment over the 4 years period. To reap the benefits under the PLI scheme, an entity will have to invest 20 percent of the promised investment, 40 percent in the second year, 70 percent in the third year, and 100 percent by the fourth year. The companies interested to avail of the benefits of the PLI scheme will also be eligible to invest in single or multiple eligible products to meet the minimum criteria for sales and investment. The scheme will also include contract manufacturers as defined by the Foreign Direct Investment Policy. The government also plans to constitute an empowered panel to review rates, ceilings, target segments, and eligibility criteria. The telecom and networking equipment PLI will have no overlap with the Ministry of electronics and information technology.
Meity to keep ₹7.5 k cr outlay for IT hardware products
The government may keep an outlay of ₹7,500 crore under the production linked incentive scheme for IT hardware products. Foreign companies looking for incentives under the scheme may have to invest ₹500 crore over four years. Threshold for domestic firms is to be around ₹20 crore for 5 years. The government may keep an outlay of ₹7,500 crore under the production linked incentive scheme for IT hardware products like personal computers, laptops, tablets and servers, according to a source aware of the development. Foreign companies looking for incentives under the scheme may have to invest ₹500 crore over four years, while the threshold for domestic firms is likely to be around ₹20 crore for five years, the source who did not wish to be named said. "Meity (Ministry of Electronics and Information Technology) will take the Cabinet approval of the detailed guidelines soon and is hopeful of rolling out the scheme from next financial year. The incentive outlay is likely to be around ₹7,500 crore," the source said. The scheme is expected to be notified within 2 weeks of cabinet approval and the government may invite applications within 4 weeks of notification of the scheme. The aim is to implement PLI schemes starting in April 2021 and the allocation for the telecom and networking equipment PLI is Rs 12,195 crore.6
ELCINA EMS Task Force Report Launched by Mr. Ajay Sawhney, Secretary, MeitY
ELCINA constituted a Task Force to study the EMS Sector and come up with a Research Report providing details of the status and prospects of this ESDM segment. The task force had representation from MeitY & Invest India. The EMS Task Force commenced deliberations in July 2020 and concluded the same in November, coming up with valuable details such as the sector’s current size, growth potential, exports and policies which impact its progress.
Globally, EMS sector was valued at US$ 832 Bn in 2019 and estimated to grow to US$ 1055 Bn by 2025. The Task Force report predicts that the Indian EMS industry will gallop from US$ 23.5 Bn in 2019-20 to US$ 152 Bn by 2025. This effectively means that it has the potential to grow from <3% of the global industry to about 14% within 5 years. The global EMS industry has grown very quickly during last 15-20 years as it has expanded the scope of its activities for the Electronic Systems Design & Manufacturing (ESDM) sector. From a small share of 10-15% in the ESDM industry, EMS now straddles in excess of 40-45% of its value. In addition to PCBA and pure assembly services, EMS has now expanded to include research & development, supply chain management, global distribution, logistics, customer support and even warranty repairs. There has been a complete transformation of the role of EMS in the ESDM industry globally.
Secretary Ministry of Electronics & IT, Government of India, Mr Ajay Sawhney, while releasing the Report, reinforced the need to manufacture PCB assemblies within the country and reduce import dependence. He said that there was plenty of opportunity for utilising the existing Schemes of NPE 2019 and additional Schemes which were being promoted for other sectors, such as medical electronics, defence and aerospace which had created huge demand for electronics. Mr Sawhney mentioned that there was a huge opportunity in products such as Servers, Laptops, Tablets etc and encouraged industry to take up these high value and large volume products. He also informed that government was keen to support expansion of the components eco-system in the country and certain follow up schemes were in the works to enable participation by more domestic companies including the Medium and Small enterprises.
Printed Circuit Board Assemblies are at the core of every electronic device. And constitute anywhere from 40-50% of the BOM of the device. To develop India as an electronics manufacturing hub, it is crucial that we expand the manufacturing ecosystem for EMS and PCBA’s in India.
Key Findings of EMS Task Force Report on Market & Industry Analysis of EMS Sector of ESDM Industry
- Currently EMS Industry (Contract Manufacturing Services) are valued 832 Bn $ and are projected to grow 1055 Bn by 2025.
- Current estimate of EMS Industry in India is USD 23.5 Bn only which is <3% of global mfg. EMS Industry has an estimated 700 Firms with about 600 Indian and 100 Multinational Companies.
- China exported US$ 685 Bn of electronics to the world during 2019-20. There is huge export potential for India EMS sector and govt has set a target of US$ 100 Bn exports of mobiles alone by 2025. This is driven by the PLI Scheme and targets about 25% of the global mobile market valued at US$ 415 Bn.
- In Non-Mobile segment, China exported electronics worth USD 50Bn to India friendly countries. Government support of 5% will empower Indian EMS sector to capture 30-40% of this, which is USD 15-20 Bn.
- Domestic electronics manufacturing is estimated at USD 75 Bn of which 39 Bn constitutes EMS value. This is divided into 23.5 Bn domestic Mfg. and USD 15.5 Bn PCBS/Sub-Assembly imports.
- Further USD 53.5 Bn is finished Electronic Goods imports of which USD 17 Bn is EMS value. Thus total EMS opportunity loss is US$ 32.5 Bn (15.5 +17).
- We estimate that EMS production can grow realistically from USD 23.5 Bn today to USD 152 Bn by 2025 at CAGR of 45%. This will meet 75% of the countries EMS requirement of US$ 203 Bn by 2025 against a total estimated market of 400 Bn.
- The Industry is broadly categorized into HVLM (High Volume Low Mix) which are the large global MNCs and few large Indian Firms and the other category is HMLV (High Mix Low Volume) largely constituted by the Indian EMS Companies catering to lower volume industrial/professional sector products.
- HVLM & HMLV have very different characteristics with respect to volume, risk, automation, supply chain, costs etc.
