Andhra Pradesh offers incentives worth $600M to boost electronics manufacturing
What's the story
Andhra Pradesh has approved a draft scheme to offer $600 million in incentives for the local manufacturing of electronic components. The state-level initiative comes after the Indian government's approval of a $2.62 billion plan in March, aimed at bolstering electronics manufacturing across the country. This move is part of India's broader strategy to strengthen its domestic tech production capabilities and reduce reliance on China.
Incentive details
State government offers tax exemptions and capital subsidies
The AP government has announced a 75% discount on land for electronics components companies looking to set up factories in the state. Further, these companies will be exempt from paying electricity consumption taxes for the first six years. The state also plans to offer a 50% capital subsidy to the first 10 firms willing to invest a specific sum over five years, or match New Delhi's subsidy amount offered to investing companies.
Production growth
India's electronics production targets
India's electronics production has more than doubled in the last six years, reaching $115 billion in 2024. This growth is largely driven by mobile manufacturing expansion from global companies like Apple and Samsung. The country is now the world's fourth-largest smartphone supplier. According to Niti Aayog, the government's top policy think tank, India aims to quadruple its electronics production to $500 billion by fiscal 2030.