EB Bureau
January 27, 2015: Realising that this is the most opportune moment to drive forward the electronics segment in the country, the Gujarat government recently launched its Electronics Policy 2014-2019. The vision behind the policy is to build a self-reliant electronics system design and manufacturing (ESDM) industry. It focuses on building a sturdy ecosystem for research and development, innovation, product design, engineering, assembly and testing, incubation and production in the electronics sector in Gujarat.
Objectives
The Gujarat Electronics Policy 2014-2019 aims to develop Gujarat as a leading ESDM destination with a turnover of US$ 16 billion and an investment of US$ 12 billion in order to create employment opportunities for 0.5 million people across the nation, all by the year 2020. Apart from this, the newly introduced policy aims at:
- Increasing exports in the ESDM sector from the current level to US$ 1 billion by 2020
- Initiating effective measures in active partnership with prospective stakeholders in the industry to enhance the availability of skilled labour in the ESDM sector
- Promoting the creation of intellectual property (IP) in ESDM
- Contributing more funds to start-ups for R&D in this segment, as well as in the nano electronics sector
- Developing centres of excellence in the ESDM sector
Thrust areas
The policy aims to facilitate the setting up of semiconductor wafer design and fabrication facilities in order to bring out chips and chip components for the automotive, telecom, agriculture, irrigation, life sciences, education, energy, water and rural development sectors. It also aims at establishing at least four greenfield and two brownfield electronics manufacturing clusters (EMCs) with high grade logistics and infrastructure. The policy lays emphasis on the setting up of a ‘Design City’ in the state to attract top design companies to set up their electronics base in Gujarat. Additionally, the government will also help in providing basic infrastructural facilities like water, power, roads, etc. The rules regarding e-waste management will also be factored in while drafting the policy.
Eligibility criteria
As stated in the policy, when the state government procures or purchases electronics, preference will be given to locally manufactured/developed electronic products (from within the state). A company’s products will be considered eligible for purchase by the state government based on the degree of local value-addition and the total number of local people employed. Even if a company uses contract manufacturing services from a company based in Gujarat or procures components that are manufactured in Gujarat, the value of such services/components will be considered in the value addition.
Incentives under the policy
The state government will play an active role in extending support to eligible units and clusters to avail benefits under the electronics manufacturing clusters (EMC) scheme—to provide state-of-the-art infrastructure in order to attract investment in the ESDM sector. Additionally, the government will offer assistance of up to 25 per cent of the project cost to SPVs in the greenfield EMCs, subject to a ceiling of Rs 200 million. The government will also offer a special incentive package for two anchor units in each of the greenfield EMCs. It will offer concessions on stamp duty and registration. Continuous power as well as a subsidy on power tariff will be extended to ESDM units. Interestingly, new units and existing units that are eligible under the terms of the new policy will get 100 per cent exemption on the VAT payable on products manufactured and sold in Gujarat for a period of five years (from the date of commencing production). For inter-state sales, 100 per cent central sales tax (CST) will be paid to the government treasury and would be reimbursed till the time GST comes in to force. A highly powered ‘single window clearance system’ has been created in order to grant approvals and clearances for setting up new units in the state.
