UP Govt Reaffirms Commitment to Electronics Manufacturing Policy with Incentives and Cluster Support

New Delhi: As Uttar Pradesh Electronics Manufacturing Policy 2020 aims to position the state as a leading hub for electronics and semiconductor manufacturing, Chief Secretary Manoj Kumar Singh recently assured the timely disbursement of incentives and pledged support for private entities establishing manufacturing clusters.

He stated: “The government is committed to providing all possible support by implementing manufacturing conducive policies that promote investments across the electronics value chain, a greater role for women in the workforce and facilitate housing infrastructure for workers in the electronics clusters.”

Decoding UP Policy

Vision and Targets

• Vision: Establish Uttar Pradesh as a global hub for electronics manufacturing with world-class infrastructure, innovation, and skilled manpower.

• Targets:
• Attract investments worth Rs 40,000 crore.
• Establish three Electronics Manufacturing Clusters (EMCs) and three Centers of Excellence (CoEs).
• Create approximately 4 lakh jobs.
• Focus on attracting semiconductor manufacturing, including FAB units and ESDM parks.

Governance Framework

• A Nodal Agency under the Department of IT & Electronics will act as the single-window interface for stakeholders.
• A Policy Implementation Unit (PIU) will oversee proposals up to Rs 200 crore.
• Proposals above Rs 200 crore require approval from the Empowered Committee (EC), chaired by the Chief Secretary.

Policy Period

• The policy is valid for 5 years and applies statewide.
• Investments must become commercially operational within 5–7 years, depending on project size.

Incentives for Investors

1. Capital Subsidy

• 15% of Fixed Capital Investment (FCI) for investments up to Rs 1,000 crore.
• Additional 10% subsidy (capped at Rs 100 crore) for investments over Rs 1,000 crore that generate at least 3,000 jobs.
• Anchor Units receive: Additional 1.5%-5% subsidy based on the number of ancillary units developed. Units in focus areas (e.g., drones, robotics, IoT) receive an extra 5% subsidy.

2. Land and Stamp Duty

• Land Subsidy: 25% subsidy in Madhyanchal and Paschimanchal regions. 50% subsidy in Bundelkhand and Purvanchal regions (capped at Rs 75 crore or 7.5% of project cost).
• Stamp Duty Exemption: 100% exemption on the first transaction; 50% on the second. 50% reimbursement for land leased for 10+ years.

3. Electricity Duty

• Exemption for 10 years: 50% in Paschimanchal. 75% in Madhyanchal. 100% in Bundelkhand and Purvanchal.

4. Skill Development

• Units reimbursed for apprentice stipends and aligned with the UP Skill Development Mission.
• Permission for 24/7 operations and women in all shifts.

5. Semiconductor-Specific Benefits

• 50% additional capital subsidy on Government of India incentives.
• 75% subsidy on the first 200 acres of land.
• 100% electricity duty exemption for 20 years.
• Dual power grid setup with cost-sharing provisions.

6. R&D Assistance

• Up to 50% of R&D project costs reimbursed (maximum Rs 5 crore over 5 years).
• Centers of Excellence (CoEs) receive 50% of project costs (capped at Rs 10 crore).

7. Other Benefits

• Interest Subsidy: 5% per annum (up to Rs 1 crore/year) for loans on projects under Rs 200 crore.
• Lease Rentals: 25% reimbursement (up to Rs 25 lakh/year) for five years.
• Logistics Subsidy: 50% reimbursement of transportation costs (up to Rs 2 crore/unit) for firms relocating to Uttar Pradesh.
• Patent Reimbursement: Up to Rs 5 lakh for domestic and Rs 10 lakh for international filings.

Focus Areas

• Mobile and telecom manufacturing.
• Semiconductors, robotics, IoT, defence, and strategic electronics.
• Establishment of e-waste recycling facilities and adherence to global environmental standards.

Electronics Manufacturing Ecosystem

The India Cellular and Electronics Association (ICEA) recently organized a high-level delegation visit to Uttar Pradesh, furthering its efforts to bolster India’s electronics manufacturing ecosystem. The meeting, led by Manoj Kumar Singh, included participation from senior government officials such as Anil Sagar, Principal Secretary of the Infrastructure and Industrial Development Department, and Abhishek Prakash, CEO of Invest UP.

Key industry leaders, including representatives from Dixon, Micromax, Karbonn, Amber, and Zetwerk, were also present to engage in discussions on the state’s growing prominence as a hub for electronics manufacturing.

The discussions focused on addressing industry concerns and identifying strategies to elevate Uttar Pradesh’s position in the global electronics manufacturing value chain. The state already plays a pivotal role in the sector, contributing approximately 40-45% of India’s electronics production and nearly 60% of the nation’s mobile phone production by value in FY24. Additionally, Uttar Pradesh accounts for 15.3% of India’s electronics exports and 25% of mobile phone exports, underscoring its critical role in the country’s electronics landscape.

ICEA Chairman Pankaj Mohindroo commended the state government’s proactive efforts, saying: “The interaction was deeply encouraging, the industry is inspired by the vision and empathetic mindset of the Uttar Pradesh government towards nurturing the electronics manufacturing ecosystem.”

“Uttar Pradesh should contribute significantly to India’s USD 500 billion electronics manufacturing goal by 2030, with a major share of the USD 200 billion. Furthermore, UP must undertake aggressive global outreach and should consider establishing international offices, which will facilitate the integration with Global Value Chains (GVCs), and draw major international brands to India,” he noted.

Furthermore, Anil Sagar highlighted the state’s forward-looking policies and continuous engagement with industry stakeholders. He emphasized: “Our policy framework is designed to support and accelerate the growth of electronics and semiconductor manufacturing in the state.”

With this robust policy environment and active collaboration with private players, Uttar Pradesh is well-positioned to strengthen its foothold in the electronics manufacturing sector while contributing significantly to India’s ambitious goals for 2030.

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