First Investment Approvals Worth Rs 9.61 Billion Under Modified Special Incentive Package scheme

Putting to rest the speculations that bureaucratic lethargy may have been delaying the execution of ambitious Modified Special Incentive Package Scheme (MSIPS) to promote manufacturing investment, the government has set the ball rolling by sanctioning three big proposals and promising 14 more within a month.

Kapil SIbal handing over the letter to Sahasra MD

Kapil SIbal handing over the letter to Sahasra MD

Friday, July 12, 2013: Indian units of Samsung Electronics and Bosch GmbH, and an Indian company Sahasra Electronics Pvt. Ltd. became the first set of beneficiaries under Modified Special Incentive Package Scheme (MSIPS) for setting up their electronics system design and manufacturing units in India. Kapil Sibal, minister for communications & IT and law and justice, handed over investment approvals worth Rs 9.61 billion under the scheme on Friday at Electronics Niketan, New Delhi.



  • Rs 4.06 billion of investment proposals from Samsung India Electronics Pvt Ltd for manufacture of smartphones in Noida. The project is expected to be implemented over the next six months.
  • Rs 5.44 billion of investment proposals from Bosch Automotive Electronics India Ltd for manufacture of automotive electronic devices like ECU engine system, ECU brake system, body computer module in Bengaluru. The project is expected to be implemented over three years.
  • Rs 111 million of investment proposals from Sahasra Electronics Pvt Ltd for manufacture of LED lighting products. The project is expected to be implemented over five years.

Bosch MD accepting letter from Sibal

Samsung and Bosch will be eligible for a subsidy of 25 per cent of their investment as these are in non-SEZ areas, while Sahasra will receive subsidy of 20 per cent as its unit is in SEZ area. MSIPS allows for subsidies of 20% and 25% on capital expenditure for companies in SEZ and non-SEZ areas respectively.

‘Scheme on course & on time’

Speaking on the occasion, Sibal said, “It is important to boost manufacturing and government is trying to promote manufacturing to create employment and bring in latest technologies in the country to serve the domestic market as well as export. Finalisation of MSIPS application in such a short span of time will help create the right atmosphere for more investment attraction in the ESDM sector in India.”

Dr Markus Hildenbrand, MD, Bosch Automotive Electronics India Pvt Ltd

Dr Markus Hildenbrand, MD, Bosch Automotive Electronics India Pvt Ltd

The minister’s emphasis on the short span of time in finalizing the applications is significant because speculations were rife recently that Government was sitting on proposals, as there was confusion over constitution of final sanctioning authority despite recommendations by Technical Evaluation Commitees (TECs) and Appraisal Committees.

The Department of Electronics and Information Technology (DeitY), which approves projects under the electronics-manufacturing policy, is expected to clear another 14 proposals in a month’s time, clarified Kapil Sibal.

The department expects at least $100 billion in foreign investments in electronics manufacturing by July 2016, the minister said. In the current fiscal year through March, it expects to clear proposals for 250 billion rupees, he said.
MSIPS has attracted more than Rs. 46 billion of investment proposals so far and they are under different stages of appraisal and approval, added Sibal.

‘Scheme well-received’

‘MSIPS provides for incentives for both large investment as well as small investment, and to multinational as well as domestic companies without discrimination.’

Varun Manwani, director, Sahasra Group has a reason to believe this. Expressing happiness to be one of the first three to receive benefits under MSIPS, says, “This proves the fact that the government is not favouring the MNCs or the big companies only. Even an Indian company can get benefits from the government.”

Kapil Sibal handing out letter to Samsung

Kapil Sibal handing over approval letter for Samsung

Although Sahasra was initially skeptcal in applying for MSIPS benefits, Varun is now delighted that they have taken the right step at the right time. “This should be a message to the companies who are still hesitant to apply that the

government is doing its bit, now it is the turn of the industry to lend support to the government as together we can make India the next manufacturing hub,” he adds.

It surely is the right time especially for LED product manufacturers, as they will also be entitled for 50% guaranteed procurement in government purchases under PMA (Preferential Market Access) policy. (Read Here)

According to Varun, the application process is a little tedious and the paper work is lengthy, but the government has paid heed to the recommendations of the applicants and many of the discrepancies have been taken care of. “The next batch of applicants will find the process easier,” he states.

In the Pipeline

Sector Investment (In Rs billion)
Telecom Products 17.7
ATMP – Semiconductor 7.5
Automotive Electronics 6.1
Electronic Components 4.5
Consumer Electronics 4.5
Power Electronics 4.1
Handheld Devices 4.1
LEDs/LED Products 3.1
Strategic Electronics 2.1

The government of India announced its National Policy on Electronics (NPE) in October 2012 as part of efforts to create jobs and reduce its trade gap by encouraging local manufacturing. The government projects electronics imports to reach as much as $400 billion a year by 2020, surpassing oil to become India’s costliest import. MSIPS was notified in July 2012 and guidelines were released in October 2012 under the NPE. Applications under MSIPS scheme were thereafter received by the Department of Electronics & IT (DeitY).

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