Assam unveils Rs 25,000 crore plan to push electronics manufacturing

The Assam government Monday unveiled a Rs 25,000-crore scheme to boost electronics manufacturing in the state with a major share earmarked for incentivising component makers, chief minister Himanta Biswa Sarma said.

Speaking to ET, Sarma also said Assam—picked by Tata Electronics for setting up a Rs 27,000 crore chip assembly and test plant—will give 60% incentive to component makers beyond the Union government grant. Incentive will be enhanced depending on the investment case.

The Tata facility in Jagiroad, Assam, is expected to start operations by March-April next year, Sarma said, adding that the state government is also building a Ratan Tata Electronics City.

“Tata project has opened our eyes, and we realised that we have an advantage in electronics, and other related areas. So, we have quickly come out with the policy on electronics component manufacturing following the central government initiative. Now we are hoping that we will be able to do something more,” he said.

The state government scheme offers production-linked incentives as well as capital subsidy.

“Over the next one or two years, I think we’ll be able to negotiate more and more industries (to come in),” Sarma said.

Highlighting that Assam offers more fiscal benefits than other states, he said this will allow industries to avail multiple schemes. Benefits include the Union government’s scheme, Assam’s own incentives, as well as the Centre’s “Unnati” benefits package for the Northeast that includes interest subvention, and power and tariff incentives.“We are ready to negotiate more if we get a very good proposal,” Sarma said.

This March, the Union cabinet had approved a Rs 23,000 crore programme to further bolster the country’s electronics manufacturing supply chain. The Electronics Component Manufacturing (ECM) Scheme—spanning six years—is expected to generate investments worth Rs 60,000 crore. The scheme would seek to increase domestic value addition and integrate local companies with global value chains.

This is just the beginning, Sharma noted after meeting electronics industry leaders in New Delhi. The chief minister is preparing to hold similar industry meetings in Mumbai, Bengaluru, and Chennai over the next three months to gauge interest from companies.

On tariff uncertainties sparked by the Trump administration, Sarma said this phase will pass soon as India’s discussions on a free trade agreement (FTA) with the US are progressing well. States are ready to take advantage of any FTA, he added.

Sharma emphasised that setting up of the Tata Electronics plant in Assam is a “natural advantage” for the state.

“Whatever (components) Tata requires, or whatever can go along with that…we’ll be able to realise more and more where Assam fits into (this) but it is a huge area,” he said, adding chip requirements for the local and global markets will become clear by next year when India’s existing facilities become operational.

He expressed the hope that many youngsters who migrated to other states for work will return to Assam as new industries open.

“We were producing human resources, but not for us,” Sarma said. “When the industry started to materialise, and they have actually started working, we realised that there is a lot of manpower in Assam spreading across various states – in Tamil Nadu, in Karnataka. We realised that we have huge potential.”