Electronics and IT Hardware – Invest Telangana

DEPARTMENT OF INDUSTRIES AND COMMERCE,
GOVERNMENT OF TELANGANA

ELECTRONICS
& EV

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Telangana's contribution towards
Electronic Production in India

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Number of companies that
operate in this sector

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Workers in the state from rich
and abundant talent pool

Sujai Karampuri
Director,
Electronics

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Telangana's contribution towards
Electronic Production in India

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Number of companies that
operate in this sector

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Workers in the state from rich
and abundant talent pool

Industry outlook, Opportunity in Telangana

India


USD 70 Billion	Values of Electronics produced in India
25%	CAGR of Electronics Industry in India From 2015-20
2nd	India’s rank in mobile manufacturing in the world in 2018 in volume
USD 5 Trillion	India’s GDP target by 2025


India’s share in global electronics manufacturing	3%
Export of electronic goods in 2018-19	USD 8.8 Billion
India’s budgetary outlay for Electronics Industry Schemes	USD 6.5 Billion
Employment generated by India’s electronics manufacturing industry	20 Lakhs

Telangana

Telangana State’s Electronics Manufacturing contributed INR 76,410 Crores in 2019-20, accounting for ~ 13% of the State’s Industrial GVA.

ESDM Policy launched in State to facilitate Electronics Investments.
2 ESDM clusters at e-City, Raviryala (602 Acres) & Maheshwaram Park (310 Acres).
Key global players such as Nvidia, Motorola, Qualcomm, AMD, CDAC, Cypress, etc.,
Home grown companies such as BHEL, BEL, HBL, ECIL, etc.
Recently attracted investments from majors such as Apple, Micromax, HFCL, Resolute, etc.
OPPO and OnePlus establishing design & development centres creating 1000+ technical jobs.

ELECTRONIC SECTOR PERFORMANCE - TELANGANA

ESDM Policy is launched in state to facilitate Electronic Investments.
2 ESDM Clusters at e-city, Raviryala(602 Acres) & Maheshwaram Park(310 Acres).
Currently accounts for 6% of the electronics production in the country.
Over 250 companies employing more than 50,000 employees across different sub-segments.
Key Global players such as NVidia, Motorola, Qualcomm, AMD, CDAC, Cypress. etc.
Home grown companies such as BHEL, BEL, HBL, ECIL, etc.
Recently attracted investments from majors such as Apple, Micromax, HFCL, Resolute, etc.
OPPO and OnePlus establishing design & development centres creating 1000+ technical jobs.

Segment-wise contribution of Industries in Telangana to the state's electronics GVA

Telangana State’s Electronics Manufacturing contributed INR 76,410 Crores in 2019-20, accounting for ~ 13% of the State’s Industrial GVA

FOCUS Sectors

Mega Projects

Handsets, OEMs, consumer electronics
Semiconductor facilities Independent Foundrie
Display Fabrication & Photonics LED Chip Fabrication Units.

Electronics Components Manufacturing System

Core components like PCBs, switches, etc.
Lithium-ion cells
Fuel cells
Preform of Silica

Electronics Manufacturing Services Industry

Design and assembly of PCBs
Functional testing and maintenance services.

Assembly, Testing, Marking and Packaging Industry

Providing AMTP lines for
Semiconductor ICs,

ELECTRONICS POLICY-INCENTIVES CHART

Electonics Wing, ITE&C Dept, Govt. of Telangana

Electronic Policy-Incentive Chart-Core, Mobile & Consumer Electronics

Parameters	TS Electronics policy-Core		TS Electronics Policy-Mobile		TS Electronics Policy-Con.Elec.
	Values	Caps	Values	Caps	Values	Caps
Capital Cost Reimbursements	20%	INR 2 Cr.	20%	INR 10 Cr.	20%	INr 15 Cr.
Land Rebate(Discount % of Market Price)	60%		60%		60%
Lease Rentals Assistance	25%	10 Years	25%	10 Years	25%	10 Years
Interest Subsidy	5.25%	5 Years (INR 5Cr.0)	5.25%	5 Years (INR 5Cr.0)	5.25%	5 Years (INR 5Cr.0)
Power Subsidy	25%	3 Years (INR 30L)	25%	3 Years (INR 30L)	25%	3 Years (INR 30L)
SGST Reimbursements	100%	7 Years	100%	7 Years	100%	7 Years
Skill Development Assistance	TASK		TASK		TASK
Electricity Duty Exemption	100%	5 Years (INR 50L)	100%	5 Years (INR 50L)	100%	5 Years (INR 50L)
Transport Subsidy	60% with 10% redcution yoy	5 Years (INR 5 Cr.)	60% with 10% redcution yoy	5 Years (INR 5 Cr.)	60% with 10% redcution yoy	5 Years (INR 5 Cr.)
Stamp Duty/ Transfer Duty/ Registration Fees Reimbursements	100% on first/ 50% on second transaction		100% on first/ 50% on second transaction		100% on first/ 50% on second transaction
Quality Certification Reimbursements	50%	INR 2L	50%	INR 2L	50%	INR 2L
Patent Registration Reimbursements	50%	INR 2L	100%	INR 5L	50%	INR 2L
Cleaner Production Practices	25%	INR 5L	25%	INR 5L	25%	INR 5L
Exhibition Reimbursements	50%	INR 5L	50%	INR 5L	50%	INR 5L

ELECTRONICS POLICY-INCENTIVES CHART

Electonics Wing, ITE&C Dept, Govt. of Telangana

Electronic Policy-Incentive Chart-LED, PCB Assembly & Mega Projects (Customized)

Parameters	TS Electronics policy-LED		TS Electronics Policy-PCBA		TS Electronics Policy-Mega (Customized)
	Values	Caps	Values	Caps	Values	Caps
Capital Cost Reimbursements	20%	INR 2 Cr.	25%	5 Cr.	20%	30 Cr.
Land Rebate(Discount % of Market Price)	60%		60%		60%
Lease Rentals Assistance	25%	10 Years	25%	10 Years	25%	10 Years
Interest Subsidy	5.25%	5 Years (INR 2.50 Cr.)	5.25%	5 Years (INR 5Cr.)	5.25%	5 Years (INR 5Cr.)
Power Subsidy	INR 1.5 per unit	5 Years (INR 50L)	25%	3 Years (INR 30L)	INR 1.5 per unit	5 Years (INR 5 cr.)
SGST Reimbursements	100%	7 Years	100%	7 Years	100%	7 Years
Skill Development Assistance	TASK		TASK		TASK
Electricity Duty Exemption	100%	5 Years (INR 50L)	100%	5 Years (INR 50L)	100%	5 Years (INR 50L)
Transport Subsidy	60% with 10% redcution yoy	5 Years (INR 5 Cr.)	60% with 10% redcution yoy	5 Years (INR 5 Cr.)	60% with 10% redcution yoy	5 Years (INR 5 Cr.)
Stamp Duty/ Transfer Duty/ Registration Fees Reimbursements	100% on first/ 50% on second transaction		100% on first/ 50% on second transaction		100% on first/ 50% on second transaction
Quality Certification Reimbursements	50%	INR 2L	50%	INR 2L	50%	INR 2L
Patent Registration Reimbursements	50%	INR 2L	100%	INR 5L	50%	INR 5L
Cleaner Production Practices	25%	INR 5L	25%	INR 5L	25%	INR 5L
Exhibition Reimbursements	50%	INR 50k	50%	INR 5L	50%	INR 5L

SUB-Sectors

Electronics design automation, protyping

Sourcing for Defence / Space
Avionics Manufacturing

The state of Telangana one of the major Aerospace and Defence hubs in the country and has a huge scope in the sub sectors –Avionics & Defence Electronics.

4 Aerospace Parks and 2 upcoming Parks (10 mins from Airport)

Adibatla SEZ, Nadergul DTA, Hardware Park 1, Hardware Park 2, GMR SEZ, Adani Park, E- City AND Eliminedu
Key Players: Presence of Key players like Safran, CFM, Honeywell Aerospace, GE, Elbit Systems, etc.
Hyderabad has a strong presence of Defence PSUs, scientific & technological institutes along with R&D agencies – ARCI, DRDO, etc.
Relatively low cost aerospace manufacturing & MRO hub for Asia-Pacific and Middle East provides a competitive edge. Hyderabad is a seismically safe city as it falls under seismic zone.

The state of Telangana is also the Pharma Capital of India – Medical Electronics

Medical Devices Park (50 minutes from Airport)

India’s largest medical devices park
Houses Asia’s largest coronary stent manufacturing facility

Telangana has over 800+ Pharma & Biotech firms valued at USD 50 Bn, it is the Vaccine capital of the world and accounts for 40% of India’s Bulk drug production. With a growth of 2.4x in Pharma exports and the presence of large multi-nationals like Dr. Reddy’s, Novartis, Biological E and Medtronic and the supply chain, Telangana presents a huge potential for Medical Electronics.

Components for EVs, drones, intelligent transport systems and automations.
Electric Vehicles and Energy Storage Systems

Telangana state aims to target 50GWH of storage demand by 2025.
The state has emerged as a pioneer for creating a conducive policy environment for all the ecosystem of EV’s.
Telangana is a key player in the national EV ecosystem with existing players like BYD-Olectra, Pure EV and Mahindra Electric, Fortum etc.
Out of a total of 150+ charging stations and more than 40 are located in Hyderabad, among the highest for any city in India.
The Government of Telangana is poised to apply for the Govt of India GiGa Factory Scheme by NITI Aayog for 10GWh lithium cell manufacturing facility.
Major markets for battery cells in India include Electric vehicles, Station Energy Storage Solutions and Consumer Electronics.

Vehicle Category	Base Case Demand	Best Case Demand
2 wheelers (Private)	2,240,624	4,883,958
3 wheelers	96,588	174,138
4 wheeler (Pvt Car)	290,578	370,360
Commercial Cars/Taxis/LCV Passenger	36,798	86,065
Buses	7,968	11,570
LCV Goods Carrier	133,405	266,728

Major Investments

Government Support

Incentive Type	Amount/Capital
Capital Investment Subsidy	20% Capped at INR 30 Cr. (USD 4,285,000) for Mega Enterprises; INR 2 Cr. (USD 285,000) for Others
SGST Reimbursement	100 % net SGST for 7 years; Capped to investments made in plant and machinery.; Capped at INR 2 Cr. (USD 285,000) for 5 years for Micro & Small Enterprises
Power Tariff Discount	25% for 5 years Capped at INR 5 Cr. (USD 710,000) for Mega Enterprises; Capped at INR 30 Lakh (USD 42000) for 3 years for Others
Electricity Duty Exemption	100% for 5 years; Capped at INR 5 Cr. (USD 710,000)
Interest Subvention	5.25% for 5 years; Capped at INR 5 Cr. (USD 710,000)
Transportation Subsidy	60% with 10% reduction YoY – for 5 years; Capped at INR 5 Cr. (USD 710,000)
Stamp Duty/ Transfer Duty/ Registration Fees Reimbursements	100% on first, 50% on second transaction
Lease Rental Assistance	25% subsidy on lease rentals for a period of 10 years
Assistance in Patent Filing	50% of the cost of filing patents; Capped at INR 5 Lakh (USD 7,100) for Mega Enterprises and INR 2 Lakh (USD 2,800) for others
Reimbursement Quality Certification costs	50% of the cost uncured for certification; Capped at INR 2 Lakh (USD 2,800) (Conformity European (CE), China Compulsory Certificate (CCC), UL Certification, ISO, CMM Certification, SA, RU etc.)
Cleaner Production Practices	25% of the cost incurred; Capped at INR 5 Lakh (USD 7,100)
Exhibition Cost Reimbursements	50% of the cost of filing patents; Capped at INR 5 Lakh (USD 7,100)
Skill Development Assistance	Skill Development Assistance will by provided by Telangana Academy for Skills & Knowledge

Government Support - Infrastructure

E-City Hardware Park EMC (EMC1):

LAND: 602 acres of EMC land (SEZ land of 263 acres) with plug and play facility. 2,00,000 sq. ft. BUA of ready to move-in plug-and-play factory space.

Road and Rail Connectivity: 1 km from Outer Ring Road, Hyderabad.
- 158 Km freeway (ORR) around Hyderabad.
- 72 km stretch PPP metro rail by L&T.
- Inland freight cost per tonne from Chennai Port at 38 USD.

AIRPORT CONNECTIVITY: 5 Kms from Hyderabad International Airport.

POWER: 220 kV power sub-station
- 300 MLD Surplus Water Supply for Industries
- Cost of water is 0.40 USD per 10 KLD.

Maheshwaram Science Park (EMC2):

LAND: 310 acres of EMC land with plug and play facility.

Road and Rail Connectivity: 10 km from Outer Ring Road, Hyderabad.
- 158 Km freeway (ORR) around Hyderabad.p

AIRPORT CONNECTIVITY:
- 14 Kms from Hyderabad International Airport.

60% discount on Land Price
20% of Land Reserved for Dormitories.
It is close to E-City by which common manufacturing facilities can be complemented
Well developed social, educational and rural infrastructure in the catchment area.

GOVERNMENT OF INDIA SUPPORT(GOI Electronics Schemes)


Production Linked Incentives	-To attract large scale investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units. -Incentive of 4% to 6% on incremental sales for 5 years. -Budgetary outlay of INR 40,995 crore for 5 years.
Specs	-Financial incentive of 25% on capital expenditure for electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods, etc. -Applicable to investments in new units and expansion of capacity/ modernization and diversification of existing units. -Applicable to investments in new units and expansion of capacity/ modernization and diversification of existing units
EMC 2.0	-Financial assistance up to 50% of the project cost subject to ceiling of Rs.70 crore per 100 acres of land for setting up of Electronics Manufacturing Cluster projects. -Financial assistance of 75% of the project cost subject to a ceiling of Rs.75 crore for Common Facility Centre (CFC) -Budgetary outlay of Rs. 3,762.25 crore for this scheme over a period of 8 years

Eligibility & Timelines – Industrial Parks/ Units – GOVERNMENT O INDIA POLICIES MENTIONEDE ABOVE

	Production Linked Incentive Scheme	Specs	EMC 2.0
Target Segments	-To promote large scale manufacturing which includes mobile phones and electronics components	-To promote domestic manufacturing of components and semiconductors to strengthen supply chain. -Investment threshold from INR 5 crore to INR 1000 Cr.	-Incentives for Electronics Manufacturing Clusters (200 acres for new EMC or 100 acres for expansion of EMCs). -Anchor unit min Inv of 300 Cr and atleast 20% land.
Tenure	-Support shall be provided for 5 years starting from FY 2019-20. -Applications period of 4 months.	-Incentives for investments made in 5 years from date of application. -Applications period of 3 years.	-Applications period of 3 years. -Disbursement of incentives for a further period of 5 years.
Eligibility	Based on Incremental investment and Incremental sales of manufactured goods.	-Investments that have already claimed M-SIPS are not eligible. -Applicants can claim other incentives from other schemes as well (except M-SIPS).	State Government or State Implementing Agency (SIA) or Central Public Sector Unit (CPSU) or State Public Sector Unit (SPSU) or Industrial Corridor Development Corporation (ICDC) to submit the application.

Government of India – Key Initiatives impacting Electronics Industry

Electronics products	Tariff changes (Basic Customs Duty)
Printed Circuit Board Assembly (PCBA) of cellular mobile phones	Increased from 10% to 20%
Vibrator Motor/ Ringer for use in the manufacture of cellular mobile phones	10%
Display Assembly for use in the manufacture of cellular mobile phones	10%
Touch Panel/ Cover Glass Assembly for use in the manufacture of cellular mobile phones	10%
Microphone Cartridge, Holder, Grill, Body	Exempt from BCD
Micro Fuse Base, Sub-Miniature Fuse Base, Micro Fuse Cover and Sub-Miniature Fuse Cover	Exempt from BCD
Liquid Crystal Polymer	Exempt from BCD
Charger or power adapter (except those in ITA1)	Increased to 20%
Fingerprint readers/scanners	15%
Health Cess on medical devices	5%

Some of the key initiatives on BCD based on their usage and certain.
GOI has also reviewed the extant FDI policy amidst Covid 19 Pandemic.

Further details can be accessed from Link.

Industry Speaks

Government of Telangana || Electronic Policy

Partner Organizations

Premier Technical Institutes for Skilling include:

Electronics Test and Development center (ETDC)
Central institute of Plastics Engineering and Technology. (CIPET)
Central Institute of Tool Design.
ECIL
BHEL

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Address:

INVEST TELANGANA CELL,
Industries and Commerce Department,
3rd Floor, Dr. B.R. Ambedkar Telangana Secretariat Rd, Central Secretariat, Khairtabad, Hyderabad, Telangana 500022

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