Telangana Electronics Policy

By Spotlight - 10-August-2018

Telangana has continuously been at the forefront of electronics manufacturing in the country. The traditional entrepreneurial spirit of the locals, coupled with the access to skilled workforce and inherent supply chain advantages of the location have resulted in tremendous growth of the Electronics industry over the last two decades. Over time, a physical ecosystem has evolved with the Electronics and associated industries in and around Hyderabad. Additionally, the high quality of technical education and skilled graduates from engineering colleges across the state has served as a critical growth factor.

Hyderabad, currently, is marching towards establishing itself as one of the leading electronic hubs globally. It houses over 250 companies, both large and small which together employ greater than 50,000 professionals. In 2014-15 the total value of electronic products and services exports accounted for USD 250 million and this amounts to about 6% of national electronics exports.

Further, the same year had witnessed a massive growth in production to the value of USD 1 billion. Hyderabad houses key global players in the MSM and Mega industries sectors, such as Nvidia, Motorola, Qualcomm, AMD, CDAC, Cypress, etc., in addition to home grown companies such as BHEL, BEL, HBL, ECIL, etc. Recently, Hyderabad has attracted investments from giants such as Apple, Micromax, etc. and has cemented its position as a promising electronics investment zone on the global map.

Vision and Goals

The Vision envisaged for the Telangana Electronics Policy 2016 is: Promoting Telangana as the ideal destination for Electronics Industry through creation of sustainable ecosystem, making this industry a major contributor to employment and economy in the State Based on historical analysis as well as the projections made by industry, Telangana aspires to achieve the following by 2020:

  • Attract investments to the tune of USD 3 billion in the Electronics sector
  • Create an employment of 160,000
  • Enhance production from approximately USD 1 billion to USD 7.5 billion

The State seeks to achieve this aim through:

a) Infrastructure support

  • Development of state-of-art EMCs by public and private collaboration
  • High quality roads and transportation
  • Good connectivity through rail, road and air
  • Reliable electricity and water supply
  • Promote the concept of duty free warehousing

b) Access to skilled workforce: Create environment to ensure availability of low cost and skilled workforce through:

  • Skill development programs from TASK
  • Workforce training subsidies

c) Supportive policy environment

  • Incentivize domestic production
  • Favorable regulatory environment resulting in ease of doing business

d) Tax and fiscal regime

  • Subsidies and other incentives
  • Stable and predictable tax regime

Although the Government of Telangana seeks to generate a myriad of positives through technological evolution, there have been rising ecological concerns over e-waste generation, management and disposal. Realizing the growing concern over e-waste, the Government of Telangana shall work on the following initiatives:

  • Formulate a comprehensive regulatory approach surrounding e-waste management.
  • Design an efficient mechanism for auditing safe e-waste management practices and ensuring compliance.
  • Setting a direction for promoting safe e-waste management practices.

Focus Areas

In order to achieve the above goals for the IT department, the Government has identified key focus areas:

  1. Development of dedicated EMCs and quality infrastructure
  2. Encouraging Electronics companies by ensuring end to end supply chain for all sub-sectors
  3. Human resources development
  4. Promote R&D, create ecosystem for innovation and startups

This in turn is expected to reinvent the business propositions and incentivize the sector so that the Industry can penetrate the global markets not only on value and cost factors, but also on customization. Keeping the above in view, Government, after elaborate discussion with respective stakeholders of Electronics sector, such as TELMA, ELCINA, MAIT, ICA, IESA etc., identified the following initiatives to be provided to the Electronics Industry in the State of Telangana.

Incentives

Incentives provided by Govt. of India under the National Electronics Policy (NPE) 2012