The scheme aims to offset the disability for domestic manufacturing of components and semiconductors to strengthen the electronics manufacturing ecosystem. Through this scheme, a financial incentive of 25% on capital expenditure to legal entities registered in India.
💰Financial Incentive: | • A financial incentive of 25% of eligible capital expenditure is provided to approved units manufacturing goods as per the eligible list annexed to the Scheme. | • The total incentive under the Scheme is 25% of eligible capital expenditure for an approved application. | • The incentive is over and above any incentive offered by the State Government or any of its agencies or local bodies. | • Applicants shall also be eligible to take benefit under any other scheme(s) of the Government of India; however, investments committed under the Modified Special Incentive Package Scheme (M-SIPS) for which incentives have been claimed shall not qualify as eligible investments under SPECS. | What Constitutes Eligible Capital Expenditure | Capital expenditure includes the following: | • Expenditure on plant, machinery, equipment and associated utilities — including tools, dies, moulds, jigs, fixtures (including parts, accessories, components, and spares thereof); expenditure on packaging, freight/transport, insurance, and erection and commissioning. Associated utilities include captive power and effluent treatment plants; clean rooms; air curtains; temperature and air quality control systems; compressed air, water and power supply; and IT/ITES infrastructure related to manufacturing including servers, software and Enterprise Resource Planning (ERP) solutions. | • Expenditure on Research and Development (R&D) — including in-house and captive R&D, test and measuring instruments, design tools, software cost (directly for R&D), and expenditure on technology, Intellectual Property Rights (IPR), patents and copyrights. | • Expenditure on Transfer of Technology (ToT) — including cost of technology and initial technology purchase related to eligible goods. | • Expenditure on refurbished/used/second-hand plant, machinery and equipment (including associated utilities and R&D) — whether imported or domestically procured — not exceeding 20% of total eligible plant, machinery and equipment. Such equipment must have a minimum residual life of at least 5 (five) years at the time of transfer of assets. | The following are NOT covered as eligible capital expenditure | • Expenditure on land and building (including factory building/construction). | • Expenditure on consumables and raw materials used for manufacturing. | Sub-Limits within Eligible Capital Expenditure | • Associated utilities expenditure: capped at not more than 20% of the total eligible capital expenditure for plant, machinery and equipment. | • Research and Development (R&D) expenditure: not exceeding 20% of the total eligible capital expenditure for plant, machinery, equipment and associated utilities. | • Transfer of Technology (ToT) expenditure: not exceeding 10% of the total eligible capital expenditure for plant, machinery, equipment and associated utilities. | • Refurbished/used/second-hand plant, machinery and equipment: not exceeding 20% of total eligible capital expenditure. | Eligible Goods and Minimum Investment Thresholds | CategoryDescription of GoodsMinimum Investment ThresholdASurface Mount Technology (SMT) components including Light Emitting Diode (LED) Chips; Chip Modules for Smart Cards, Radio Frequency Identification (RFID) Antenna and Labels, Chip-on-Board (CoB)/System in Package; Passive components (resistors, capacitors, ferrites) for electronic applications; Electromechanical components (transformers, inductors, coils, relays, switches, micro motors, stepper motors, Brushless Direct Current (BLDC) Motors, Connectors, Heat Sinks, Antenna, Speakers, Microphones, etc.) for electronic applications; Magnetrons, Wave guides, Circulators, Couplers, Isolators, Filters, Magnets, Radio Frequency (RF) Components for electronic applications; Printed Circuit Boards (PCBs), PCB Laminates, Prepegs, Photopolymer films, PCB Printing Inks; Printed Flexible Electronics; Sensors, Transducers, Actuators and Crystals for electronic applications; Camera Modules, Vibrator motor/ringer; Universal Serial Bus (USB)/Data Cables, High-Definition Multimedia Interface (HDMI) Cables; Capital goods for all goods covered under SPECS.₹5,00,00,000/- (₹5 Crore)BActive Components — Discrete semiconductor devices (transistors, diodes, etc.); Power semiconductors (Field Effect Transistors (FETs), Metal Oxide Semiconductor Field Effect Transistors (MOSFETs), Thyristors, etc.); Preform of Silica and Optical Fibre; Display Assembly and Touch Panel/Cover Glass Assembly.₹15,00,00,000/- (₹15 Crore)CMicro/Nano-electronic components such as Micro Electro Mechanical Systems (MEMS) and Nano Electro Mechanical Systems (NEMS); Assembly, Testing, Marking and Packaging (ATMP) units.₹25,00,00,000/- (₹25 Crore)DMechanics (plastic and metal parts) for electronic applications.₹75,00,00,000/- (₹75 Crore)ECompound Semiconductors such as Gallium Nitride (GaN), Silicon Carbide (SiC), Gallium Arsenide (GaAs), and Silicon Photonics devices/Integrated Circuits, Optoelectronic components.₹2,50,00,00,000/- (₹250 Crore)FSemiconductor Wafers.₹5,00,00,00,000/- (₹500 Crore)GSemiconductor Integrated Chips (ICs), including Logic [Microprocessors, Microcontrollers, Digital Signal Processors (DSP), Application Specific Integrated Circuits (ASICs), etc.]; Memory; Analogue/Mixed Signal ICs, etc. Display fabrication units including Liquid Crystal Displays (LCD), Light Emitting Diode (LED), Organic Light Emitting Diode (OLED), etc., for electronic applications.₹10,00,00,00,000/- (₹1,000 Crore)