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With Apple, Samsung, HP and other hardware manufacturers looking to re-organise their global manufacturing facilities to reduce their dependence on China, Tamil Nadu has taken the lead to woo these players with a clear strategy.
Clearly, a lot is at stake. Apple alone is looking to invest as much as $1 billion through its vendors — Foxconn and Pegatron — in India. TN wants to capitalise on the fact that Foxconn recently started manufacturing ‘Made in India’ iPhones from its Sriperumbudur factory, near here, to attract both the partners of Apple. Samsung, too, has operations in the State, as do HP and Dell.
Recently, TN Chief Minister Edapaddi K Palaniswami had written personal letters to heads of 13 global electronics majors, including Apple CEO Tim Cook; Samsung President and CEO Kim Hyun Suk; Amazon CEO Jeff Bezos, and HP President and CEO Enrique Lores.
He promised them an attractive investment climate and, on Monday, the government delivered on that, by releasing a comprehensive Electronics Hardware Manufacturing Policy 2020.
Through this policy the State aims to increase Tamil Nadu’s electronics industry output to $100 billion by 2025 and the State’s contribution to India’s total electronic exports to 25 per cent.
Attracting global players
The objective is to transform the State into an innovative and a globally competitive electronics system design and manufacturing (ESDM) destination. To attract global ESDM majors to Tamil Nadu, the policy seeks to provide infrastructure and supporting ecosystem to ESDM companies.
Simultaneously, it will incentivise home-grown start-ups in the ESDM sector, catalyse the growth of innovation-led enterprises that manufacture hardware products and solutions and develop the semiconductor fabrication (FAB) industry in Tamil Nadu. With the new policy, the State government aims to attract at least two major FAB investments in the next three years.
The policy also seeks to add value, especially in focus sectors such as mobile handsets, LED products, fabless chip design, PCBs, solar photovoltaic cells, medical electronics, and automotive electronics.
Financial sops
Financial incentives will be offered based on three categories: MSMEs, large — with investments in the range of ₹200-500 crore — and mega — with investments in the range of ₹200-500 crore
Financial incentives for large and mega projects include capital subsidy, subsidy on land lease cost, stamp duty exemption, training subsidy, interest subsidy, exemption of electricity tax, subsidy for intellectual capital and enhanced quality certification and environment protection infrastructure. Also, there will be incentives for EMC clusters and private ESDM park developers.
Clearances for setting up new electronics enterprises or expanding existing ones under this policy shall be processed via the single window portal of guidance.
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