ECMS

The scheme aims to provide financial incentives for manufacturing electronic components in Bharat. Through this scheme, turnover and capital expenditure-linked incentives are provided to companies and Limited Liability Partnerships.

The scheme "Electronics Component Manufacturing Scheme" has been launched by the Ministry of Electronics and Information Technology, Government of India. It aims to provide financial incentives for the manufacturing of identified electronic components and capital goods in Bharat. Through this scheme, turnover-linked and capital expenditure incentives are provided to companies and Limited Liability Partnerships investing in greenfield or brownfield projects within the target segments. The scheme is implemented by a Project Management Agency (PMA) appointed by the Ministry of Electronics and Information Technology (MeitY). The scheme seeks to ensure the effective operation and smooth implementation of electronic system design and manufacturing (ESDM) through detailed industry consultations. It focuses on sub-assemblies, bare components, selected bare components, and the supply chain ecosystem, including capital equipment.

• The applicant should be a company registered in Bharat under the Companies Act, 2013 (or the erstwhile Companies Act, 1956) or a Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008.
• The applicant should be investing in the manufacture of target segment goods in Bharat.
• The applicant shall meet the threshold criteria regarding investment, sales, and employment as per Annexure 3 of the guidelines.1. The applicant shall meet the minimum consolidated global Electronics System Design and Manufacturing (ESDM) revenue or manufacturing revenue for the Financial Year.
• The applicant shall submit separate applications for each target segment product.
• The applicant shall maintain a net worth greater than or equal to 50% of the proposed investment for target segment D.
• The applicant shall ensure that Foreign Direct Investment (FDI) is in compliance with the FDI Policy Circular 2020.

> Nature of Incentives by Target Segment:

> The scheme offers three types of incentives depending on the target segment:

Sl. No.Target SegmentNature of IncentiveASub-Assemblies1Display module sub-assemblyTurnover Linked Incentive2Camera module sub-assemblyTurnover Linked IncentiveBBare Components3Non-Surface mount devices (non-SMD) passive components for electronic applicationsTurnover Linked Incentive4Electro-mechanicals for electronic applicationsTurnover Linked Incentive5Multi-layer Printed Circuit Board (PCB)Turnover Linked Incentive6Li-ion Cells for digital applications (excluding storage and mobility)Turnover Linked Incentive7Enclosures for Mobile, IT Hardware products and related devicesTurnover Linked IncentiveCSelected Bare Components8High-density interconnect (HDI)/ Modified semiadditive process (MSAP)/ Flexible PCBHybrid Incentive9SMD passive componentsHybrid IncentiveDSupply Chain Ecosystem and Capital Equipment10Parts/components used in the manufacturing of subassembly (A) and bare components (B) & (C)Capex incentive11Capital goods used in electronics manufacturing, including their sub-assemblies and componentsCapex incentive

• Turnover Linked Incentive: Applicable to Sub-assemblies (Segment A) and Bare Components (Segment B). The incentive is calculated on net incremental sales over the base year, multiplied by the applicable incentive rate.1. Hybrid Incentive: Applicable to Selected Bare Components (Segment C), comprising both turnover-linked incentive and Capex incentive.1. Capex Incentive: Applicable to Supply Chain Ecosystem and Capital Equipment (Segment D). The incentive is calculated on eligible incremental capital expenditure, multiplied by the applicable incentive rate.1. Employment Incentive: A portion of the incentive (1% for turnover-linked or 5% for Capex) is specifically disbursed upon meeting cumulative incremental employment threshold criteria.1. Additional Incentive: An additional 2% incentive on incremental sales is provided for Li-ion Cells if cathode active material (CAM) is sourced or manufactured domestically.

• An additional 1% incentive on incremental sales is provided for Multi-layer PCB if the laminate is sourced or manufactured domestically.

> Incentive Rates:

Sl.No.Target SegmentESDM Revenue (₹)Manufacturing Revenue (₹)1Display module sub-assembly250 crore750 crore2Camera module sub-assembly250 crore750 crore3Non-SMD passive components50 crore150 crore4Electro-mechanicals50 crore150 crore5Multi-layer PCB50 crore150 crore6Li-ion Cells for digital applications (excluding storage and mobility)250 crore750 crore7Enclosures for Mobile, IT Hardware products and related devices250 crore750 crore8HDI/MSAP/Flexible PCB500 crore1500 crore9SMD passive components250 crore750 crore(Incentive rates listed year-wise across 6 years of the incentive period)

• The applicant shall not consider manufacturing through contract manufacturers as eligible under the scheme.
• The applicant shall not be eligible for incentives on investments or sales already incentivized under any other Government of Bharat scheme.
• The applicant shall not include expenditure on land and buildings as an eligible investment.
• The applicant shall not include expenditure on consumables and raw materials as an eligible investment.