Incentives
4% – 6% Production Linked Incentive for a period of 5 years – PLI scheme for Electronics manufacturing
Target Segments
Mobile Phones & Specified Electronic Components
Tenure
Five (5) years Application Period 4 months initially
Base Year
Financial Year 2019-20
Eligibility
The number of applications allowed per applicant for support under the Scheme shall be restricted to one . Subject to thresholds of incremental investment and incremental sales of manufactured goods
Applicability Incentives applicable from 01.08.2020
Invoice Value:
Unit Price charged on an invoice raised by an applicant on sale of manufactured goods, net of credit notes, discounts or any other adjustments and applicable taxes
Net Sales Turnover
Net Sales Turnover shall mean the Gross Sale Turnover net of credit notes (raised for any purpose), discounts (including but not limited to cash, volume, turnover, target or for any other purpose) and taxes applicable
• Manufacturing: Processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character [CGST Act – 2017]
Employment:
Jobs which are directly involved in the production process or with related activities beginning from when materials enter a production facility and up until the resultant manufacturing good leaves the production facility. Such employment shall include on-roll, contractual and apprentice workforce in the country only
Domestic Value Addition:
A divided by B A. Net Sales Turnover minus value of non-originating material and services used in manufacturing B. Net Sales Turnover
Non-Originating Material and Services:
Material and Services whose country of origin is other than the country in which that material / service is used in manufacturing and any material / service whose origin cannot be determined
Competent Authority:
Competent Authority under the Scheme shall be defined as per delegation of powers for appraisal and approval of Public Funded Schemes and Projects vide OM No. 24(35)/PFII/2012 dated 05.08.2016 issued by Department of Expenditure, Ministry of Finance or any subsequent modifications thereof
Domestic Company(ies):
Domestic Company(ies) shall be defined as those which are owned by resident Indian citizens as defined in the FDI Policy Circular of 2017. A company is considered as ‘Owned’ by resident Indian citizens if more than 50% of the capital in it is beneficially owned by resident Indian citizens and / or Indian companies, which are ultimately owned and controlled by resident Indian citizens.
Group Company(ies):
Group Company(ies) shall mean two or more enterprises which, directly or indirectly, are in a position to:
• Exercise twenty-six percent or more of voting rights in other enterprise; or
• Appoint more than fifty percent of members of board of directors in the other enterprise. (As defined in the FDI Policy Circular of 2017)
Eligibility Criteria
1.Eligible companies should be engaged in manufacturing of goods in India as covered under Target Segments.
2. Eligibility shall be subject to thresholds of Incremental Investment and Incremental Sales of Manufactured Goods (covered under Target Segments) over the base year
3. An applicant must meet threshold criteria to be eligible for disbursement of incentive for the year under consideration.
4. In case an applicant does not meet threshold criteria for any given year, the applicant shall not be eligible for incentive in that particular year. However, the applicant will not be restricted from claiming incentive in subsequent years during the tenure of the Scheme, provided eligibility criteria are met for such subsequent years
Qualification Criteria and Ceiling
Eligibility shall be subject to qualification criteria for applicants under different Target Segments in the Scheme are as defined
| Segment Qualification Criteria Ceiling on eligible applicants* | Segment Qualification Criteria Ceiling on eligible applicants* | Segment Qualification Criteria Ceiling on eligible applicants* |
| Mobile (Invoice value of INR 15,000 and above) | Consolidated Global Manufacturing Revenue of the applicant (including its Group Companies), in the target segment, should be more than INR 10,000 Crore in the base year | 5 |
| Mobile – Domestic | Consolidated Global Manufacturing Revenue of the applicant (including its Group Companies), in the target segment, should be more than INR 100 Crore in the base year. Applicants under this category can only be Domestic Companies | 5 |
| Specified Electronic Components | Consolidated Global Manufacturing Revenue of the applicant (including its Group Companies), in the target segment, should be more than INR 50 Crore in the base year. | 10 |
Sale of Manufactured Goods
Specific Conditions of Incremental Sale of Manufactured Goods (Covered under Target Segments) .
Total Sales of Manufactured Goods covered under Target Segments for such year over the Base Year, irrespective of Invoice Value (whether below or above INR 15,000 in case of Mobile Phones) shall be considered.
Calculation of Incentive
Net Incremental Sales of Eligible Product x Rate of Incentive Where
• Net Incremental Sales shall be Net Sales Turnover of Eligible Product for the period to which claim for disbursement of incentive pertains minus the Net Sales Turnover of said Eligible Product as per baseline
• The incentive amount payable will be subject to ceilings on Net Incremental Sales Turnover on which incentive shall be applicable as determined by EC
• The annual financial outlay will be appropriated proportionately depending on number of applicants under each target segment. At the end of the year, unappropriated incentive amount resulting from under performance by any applicant(s), will be allocated to the remaining eligible applicants relative to their performance under the Scheme. Illustratively, if there are five (5) eligible applicants under Mobile Phones (Invoice Value of INR 15,000 and above) target segment, the year-wise incentive ceiling per applicant will be 1/5th of the annual financial outlay for the said target segment. 17 Disbursement Process
PLI Scheme – Eligibility Criteria
| Segment | Proposed Incentive Rate (%) | Incremental Investment over Base Year Incremental Sales of Manufactured Goods over Base Year | Incremental Investment over Base Year Incremental Sales of Manufactured Goods over Base Year |
| Mobile (Invoice value of INR 15,000 and above) * | Year 1: 6% Year 2: 6% Year 3: 5% Year 4: 5% Year 5: 4% | INR 1000 Crore over 4 Years Cumulative Minimum Year 1: 250 Year 2: 500 Year 3: 750 Year 4: 1000 Year 1: INR 4 | Year 1: INR 4,000 Crore Year 2: INR 8,000 Crore Year 3: INR 15,000 Crore Year 4: INR 20,000 Crore Year 5: INR 25,000 Crore |
| Mobile – Domestic | INR 200 Crores over 4 Years Cumulative Minimum Year 1: 50 Year 2: 100 Year 3: 150 Year 4: 200 | Year 1: INR 500 Crore Year 2: INR 1,000 Crore Year 3: INR 2,000 Crore Year 4: INR 3,500 Crore Year 5: INR 5,000 Crore | |
| Specified Electronic Components | INR 100 Crores over 4 Years Cumulative Minimum Year 1: 25 Year 2: 50 Year 3: 75 Year 4: 100 | Year 1: INR 100 Crore Year 2: INR 200 Crore Year 3: INR 300 Crore Year 4: INR 450 Crore Year 5: INR 600 Crore |
PLI Scheme – List of Specified Electronic Components
1. SMT components
2. Discrete semiconductor devices including transistors, diodes, thyristors, etc.
3. Passive components including resistors, capacitors, etc. for electronic applications
4. Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks
5. Sensors, transducers, actuators, crystals for electronic applications
6. System in Package (SIP)
7. Micro / Nano-electronic components such as Micro Electrome chanical Systems (MEMS) and Nano Electromechanical Systems (NEMS)
8. Assembly, Testing, Marketing and Packaging (ATMP) units
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