Andhra Pradesh Electronics Policy

By Spotlight - 10-August-2018

The Vision envisaged for the Andhra Pradesh Electronics Policy 2014-2020:

‘To develop Electronics Industry as an important Growth Engine for Andhra Pradesh through effective use of the talent pool, skill enhancement, promotion of innovation and future technologies and creation of excellent infrastructure.’ The Policy aims to attract investments to the tune of USD 5 Billion in ESDM sector and create an employment of 0.4 Million by 2020.

Government of AP intends to achieve its vision, objectives and goals set forth above, through a combination of the following strategies.

Adopting and promoting of NPE 2012 of GoI:

Given the comprehensive and holistic nature of the National Policy on Electronics 2012, the Government of AP intends to fully leverage the same and build upon its strengths, as stated below:

  • Electronics Manufacturing Clusters (EMCs): The EMC Scheme intends to create infrastructure highly suited to electronics units by providing a subsidy of 50%. The Government of Andhra Pradesh proposes to promote the development of 20 EMCs across the State, by facilitating the preparation of project proposals by the entrepreneurs and providing single-window clearances.
  • Target investment of Rs 30,000 cr under M-SIPS: Government would make all efforts to attract investments to the tune of Rs 30,000 cr (USD 5 Billion) and facilitate the units to get the 25% Cap Ex subsidy under the M-SIPS scheme of GoI.
  • Preferential Market Access: The policy of GoI on preferential market access for domestically manufactured electronics products shall be implemented in all departments procuring electronics in large quantities. Additional preference shall be given to AP-based domestic manufacturers.
  • Create a Joint Government-Industry committee to market India and attract investments in the country.
  • Create a fund under the management of the Committee comprising representatives of industry bodies and government, with an equal stake to promote design, manufacturing, assembling and innovation and packaging business.

Building Infrastructure

  • Mega Electronics Hub: Government of Andhra Pradesh envisages developing Information Technology and Investment Region (ITIR) in Visakhapatnam. In the ITIR, the Government would reserve two clusters / areas to be solely developed as Electronics Hubs. Visakhapatnam is proposed to be developed as Mega Electronics Hub for the state.
  • Electronic Hardware Park(s): The state Government will facilitate the setting up of the Electronic Hardware Park in Kakinada as announced by the GoI. The park would have the ‘State-of-the-art’ infrastructure with all basic amenities such as internal roads, water, power and other common facilities for the Electronics Units.
  • Common Facilities Centre: Common Facilities Centres would be created in all identified Electronics Hubs.
  • Visakhapatnam-Chennai corridor: Fast movement of inputs, components and finished products is essential for cost-effectiveness in the ESDM sector, which otherwise operates on thin margins. Steps would be taken to enhance the logistics on the Visakhapatnam-Chennai Corridor.
  • PPP for creation of Electronics Hardware Infrastructure: The facilities, in the form of electronics hubs, hardware parks and electronics zones, shall be developed adopting a transparent PPP policy.
  • Renewable Energy: The State Government will encourage units using renewable energy. Units using renewable source of energy with a minimum of 40% of their power requirements coming from renewable sources for their operations and manufacturing will be eligible for additional incentives such as Electricity Duty exemption for 5 years. Sales tax exemption for two additional years shall be available against the Carbon Credits earned on a year-on-year basis.

Other Critical Infrastructure:

  • Air Connectivity: The process of expansion and modernization of the airports at Visakhapatnam and Tirupati are a foot.
  • Assured Power: Within a span of 5 years, the Government intends to make the State power surplus. As an interim measure, the electronics industry would be exempt from the purview of statutory power cuts.
  • Social Infrastructure: A multi-departmental mechanism would be established to improve the social infrastructure in the cities where ITIR or EMCs are proposed to be developed.

Top-up incentives of GoI

In addition to the incentives by the GoI as per NPE 2012, the Government of Andhra Pradesh shall provide the following additional incentives.

  1. Incentives applicable to all categories of Electronic Hardware Industry:

A1. Non Fiscal Incentives

  • Electronics Industry would be exempted from inspections/certifications under the following Acts and the Rules framed there under and as administered by the Labour Department, barring inspections arising out of specific complaints. The Electronic Industry (units) are permitted to file self-certificates, in the prescribed formats for the following statutes: The Factories Act 1948, The Maternity Benefit Act 19...