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Karnataka’s new industrial policy to push mobile production

PTI New Delhi | Updated on September 20, 2020 Published on September 20, 2020

A file picture of workers solder wires on printed circuit boards of a mobile handset at Lava International Limited's manufacturing plant in Noida.   -  REUTERS

The new policy provides for reimbursement of stamp duty and registration charges, the refund of land conversion fee, power tariff compensation and exemption from electricity duty.

The new industrial policy of Karnataka is expected to push mobile production in value terms in the state to ₹30,000 crore and create 1.2 lakh jobs by 2023, mobile handset and electronics body ICEA said on Sunday.

In August, Karnataka announced New Industrial Policy (NIP) 2020-25 which has a provision to incentivise mobile manufacturing.

The India Cellular and Electronics Association (ICEA), whose members include Apple, Winstron, Lava, among others, said specific policy incentives such as production linked incentive of 1 per cent of annual turnover during the policy period for five years is a welcome and bold step by the state government.

“We are confident that such initiatives will help the ESDM (Electronics System Design and Manufacturing) sector to grow. Currently, the state’s share in the country is 1-1.5 per cent (₹2,500 crore) of mobile production, which is expected to cross 7 per cent or ₹30,000 crore by 2023,” ICEA Chairman Pankaj Mohindroo said.

“This will also boost employment by creating 1.2 lakh jobs by 2023,” he added.

Karnataka has an estimated gross state domestic product of over ₹16 lakh crore, with 70 per cent of India’s chip designers based in the state.

The new industrial policy provides for reimbursement of stamp duty and registration charges, reimbursement of land conversion fee, power tariff reimbursement and exemption from electricity duty.

“The Karnataka government’s NIP 2020-25 is a very forward-looking policy which addresses several crucial labour reforms such as working shifts for women employees, overtime hours...Such measures put Karnataka at the forefront of ‘Ease of Doing Business’ in the country,” Sudipto Gupta, managing director, Wistron India and chairman of ICEA’s labour and HR Committee said.

Wistron is one of the electronic manufacturing companies in the state which plans to raise its headcount from around 2,000 in May 2020 to 20,000 by the end of next fiscal year.

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Published on September 20, 2020
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