In an initiative to upgrade brownfield clusters, DeitY has chalked out guidelines for brownfield EMCs, while guidelines for greenfield EMCs are expected soon
For a long time, the Indian electronics manufacturing industry has been waiting for facilities that could help develop brownfield clusters for electronics manufacturers. Finally, it seems that the guidelines for brownfield Electronic Manufacturing Clusters (EMCs), rolled out by the Department of Electronics and Information Technology (DeitY), will put an end to the problems faced by manufacturers.
Under the Modified Special Incentive Package Scheme (M-SIPS), the government will provide fiscal incentives to Electronics System Design and Manufacturing (ESDM) units located in EMCs. Through M-SIPS, assistance will be provided to both brownfield as well as greenfield units.
Brownfield EMCs are locations with existing electronics manufacturing activity. While DeitY chalks out guidelines for brownfield EMCs, we can soon expect the guidelines for greenfield EMCs as well.
With these guidelines in place, manufacturers can avail a number of benefits.
Under M-SIPS, 25 per cent subsidy is available to eligible electronics manufacturing units located in EMCs. The current guidelines are consequential to the said policy pronouncement and enables identification of brownfield EMCs, wherein M-SIPS benefit would be available. As per these guidelines, a brownfield EMC will be, as far as practicable, a contiguous area wherein the collocated ESDM units have potential synergies and positive externalities.
Ideally, a proposed brownfield EMC should have an aggregate annual turnover of at least Rs 10,000 million and a minimum of seven units. These units may produce the same or related ESDM products or services. They can use a similar input or share similar processes that will help create synergies and positive externalities across the units.
Also, these units can have access to common technical knowhow and assistance, and have linkages to scientific, academic and R&D institutions.
While the government will provide assistance to the units in brownfield EMCs, its role will be that of a facilitator. The members of the brownfield EMCs will need to set up a special purpose vehicle (SPV) to manage the facilities.
All applications for notification of brownfield EMCs, as per the application format, need to be submitted to DeitY. Hence, those interested need to fill in the required information pertaining to the proposed cluster. Details include the name of the applicant, the location of the cluster, constituent units, synergies and positive externalities, association with scientific, academic and R&D institutions, and environmental assessment.
By Richa Chakravarty
