The government of Andhra Pradesh has approved a major incentive package worth $600 million (approximately ₹5,000 crore) aimed at attracting investments in the electronics components manufacturing sector. This move positions the state as a key player in India’s larger strategy to become self-reliant in electronics production and reduce import dependency.
Strategic Vision Aligned with National Policy
This initiative is in line with the Central Government’s broader objective under the Electronics Components Manufacturing Scheme (ECMS), which seeks to establish India as a global manufacturing hub. The Centre has already allocated ₹22,919 crore for supporting electronics component manufacturing, and Andhra Pradesh’s state-level contribution will complement this by offering location-specific incentives.
The overall goal is to help India reach $500 billion in electronics output by 2030, with $150 billion targeted from electronic components alone.
Key Highlights of the Incentive Package
- Capital Subsidy: The state will offer up to 50% capital subsidy to the first ten companies that invest ₹2.5 billion or more over five years or match the central government’s approved subsidies, whichever is higher.
- Land Subsidy: Eligible firms will receive a 75% discount on land purchased in designated industrial zones including Sri City, Hindupur, Kopparthy, and Tirupati. This aims to reduce the cost of setting up facilities.
- Electricity Duty Exemption: There will be a 100% exemption on electricity duty for six years, making operations more cost-efficient for manufacturers during the early stages.
- Industrial Infrastructure: The policy will be implemented through the Andhra Pradesh Industrial Infrastructure Corporation (APIIC), which will ensure timely allocation of land and infrastructural support.
Early Corporate Interest
One of the early companies to show interest under this scheme is Syrma SGS, signaling confidence among private players. Additionally, LG Electronics has already begun construction of a ₹5,000 crore manufacturing complex in Sri City. This facility is expected to generate nearly 1,500 direct jobs and over 10,000 indirect jobs, with an annual output covering refrigerators, air conditioners, compressors, and other consumer electronics.
Geographic Advantage
The scheme focuses on promoting manufacturing in industrially strategic regions such as Sri City, Tirupati, Hindupur, Kopparthy, and Orvakal. These locations are already part of larger industrial corridors, such as the Visakhapatnam–Chennai Industrial Corridor (VCIC), which provides robust connectivity, logistics, and port access.
Boost to India’s Electronics Ecosystem
India’s electronics sector has more than doubled in the last six years, reaching $115 billion in 2024. However, a significant portion of this value is still driven by imports, especially of high-value components such as circuit boards, semiconductor assemblies, and chipsets. Andhra Pradesh’s policy is designed to localize this supply chain by attracting companies that produce passive and active electronic components domestically.
Long-Term Impact
The $600 million package is currently in its draft stage and expected to be finalized after consultations with industry stakeholders. Once implemented, it is poised to create thousands of jobs, reduce India’s electronics import bill, and help Andhra Pradesh emerge as a premier destination for component-level manufacturing.
This move not only enhances Andhra Pradesh’s industrial competitiveness but also strengthens India’s positioning in the global electronics value chain by encouraging upstream investments in critical components manufacturing.
