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Monday, 15 Sep 2014
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Andhra Pradesh – India’s next electronics hub

Andhra Pradesh is set to be an electronics hub, with the state government coming out with an ambitious electronics policy. The demand for electronics in India is set to reach USD 400 billion by 2020, and the Andhra government is all set to capture a major chunk of this market.


AndhraElectronicspolicy | ProjectsToday


On 9 September, the government of Andhra Pradesh unveiled an electronics policy 2014-2020 giving impetus to electronics manufacturing in the state. The vision envisaged in the policy is to develop the electronics industry as an important growth engine for Andhra Pradesh through effective use of the talent pool, skill enhancement, promotion of innovation & future technologies and creation of excellent infrastructure. This is a well thought out plan of the industrially starved new Andhra Pradesh.


The policy is valid till 2020 unless modified, and supersedes the “Andhra Pradesh Electronics Hardware Policy 2012-17”. This policy will be reviewed and updated every year, if required, in consultation with the stakeholders.



The electronics policy aims to attract Rs 30,000 crore of investment in the Electronics Systems Design and Manufacturing (ESDM) sector and facilitate the units to get the 25 per cent capex subsidy under the Modified Special Incentive Package Scheme (M-SIPS).


Under the policy, the state government proposes to promote the development of 20 electronics manufacturing clusters (EMCs) across the state, by facilitating the preparation of project proposals by the entrepreneurs, and providing single window clearances. Major thrust areas identified in the electronics sector include fabless semiconductors, mobile, LED, smart meters, FPD TVs, tablets, base stations, smartcards, sensors, IOT.


A special dispensation will be provided to mega projects i.e. projects with a minimum investment of Rs 250 crore or the ones that can create employment for more than 2,000 persons in a span of five years.


The AP Electronics Policy also emphasizes on the need to create mega infrastructure to support the electronics sector. Infrastructure facilities, in the form of electronic hubs, hardware parks and electronic zones, will be developed adopting a transparent PPP policy. Visakhapatnam is proposed to be developed as a mega electronics hub for the state. The state government envisages developing an Information Technology and Investment Region (ITIR) in Visakhapatnam. Two clusters will be solely developed as electronics hubs within this ITIR.


The state government will facilitate the setting up of the electronic hardware park in Kakinada. The park will have all basic amenities such as internal roads, water, power and other common facilities to ensure smooth operations of electronic units. Electronic bazaars will also be set up at Vizag, Vijayawada and Tirupati, as platforms for electronic products in the state.


To attract companies to set up electronic units in the state, the policy offers fiscal incentives like 100 per cent reimbursement on registration & stamp duty, power subsidies, exemption of electricity duty, VAT/ CST reimbursement, investment subsidies, rebate on land cost etc.


The policy on preferential market access for domestically manufactured electronic products will also be implemented in all departments procuring electronics in large quantities, with additional preference being given to AP-based domestic manufacturers.


The demand for electronics in India was USD 70 billion in 2013-14 and is expected to reach USD 400 billion by 2020. However, with a low domestic manufacturing base and a low value addition, the demand-supply gap is likely to reach USD 300 billion by 2020. To fill this gap by enhancing domestic manufacturing and value-addition in ESDM, the Union government has notified the National Policy on Electronics in 2012. The NPE 2012 seeks to attract investments to the tune of USD 100 billion in the electronics sector. The AP government plans to fully leverage the comprehensive and holistic nature of the NEP 2012 by building upon its strengths, and emerge as an electronics manufacturing hub.


Quote of the week:

Ravi Shankar Prasad, Minister of Communication and IT
"I am very hopeful of attracting investors for three reasons — our technological base, availability of good technical people and thirdly, incentives, which the new Government has promised for ease of doing business. This Budget has given the biggest incentive to electronic manufacturing in India."
- Ravi Shankar Prasad, Minister of Communication and IT
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