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The government stopped accepting fresh applications under the scheme at the end of 2019. The global mobile handset market which is expected to be $648 billion by 2025.
“In order to quickly get global investors to shift their manufacturing facilities from existing locations, M-SIPS has to provide an undeniably attractive incentive package that makes financial sense for the intended beneficiaries. The focus should, simultaneously, be on developing the long term soft and hard infrastructure to compete nimbly with world leaders,” IAMAI said in a report titled ‘Modified Special Incentive Package Scheme(M-SIPS) 2.0’.
While MSIPS 1.0 successfully managed to attract foreign investments into mobile manufacturing albeit into the low value- additive processes, India needs to focus on the components which have the potential of high-value addition and can be commonly used across the electronics manufacturing sector. According to IAMAI, manufacturing of Printer Circuit Boards (PCB), plastic mouldings and display modules could be some of the areas of focus.
In its recommendations, IAMAI says that M-SIPS incentive be raised to 30% from 25% of the capex to offset the opportunity cost of starting component manufacturing facility in India. It also recommends the ministry of electronics and IT to set up a special purpose vehicle quickly evaluate, assess and disburse applications under M-SIPS 2.0.
India also needs to work on developing its transport and logistics infrastructure, introduce labour reforms, provide focussed skill training and streamline its processes to ensure enhanced ease of doing business, it added.
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