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Karnataka IT Minister Delivers Memorandum to Union IT Minister for Incentives to Promote Electronics, Semiconductor Sector
Priyank Kharge, the IT minister for Karnataka, met with Ashwini Vaishnaw, the IT minister for Union and delivered a memorandum seeking that the Center grant Karnataka fiscal incentives to promote the electronics and semiconductor sector.
"Given the national level focus which has been provided to the sector, Karnataka is working on increasing its competitiveness and continues to be the frontrunner in developing a conducive ecosystem for electronics and semiconductor companies. While the State puts in its efforts, I wish to push forward a request to you for understanding the possibility for the Government of India to also enhance its funding support towards Karnataka," Kharge said.
"Funding support from government of lndia can be put to use towards infrastructure upgradation, developing industry-specific skilling programmes and bridging the gap between skill requirement and disposable talent pool present in the state, research and development initiatives, among others," he said.
According to him, the state is home to innovative R&D projects carried out by businesses like Applied Materials, Texas Instruments, General Electric, Intel, Samsung, and Qualcomm.
Karnataka announced the Special Incentives Scheme for ESDM industry 2020-2025 in 2020, recognizing semiconductor design and manufacturing as a target segment, to boost investments in the electronics system design and manufacturing (ESDM) industry.
An array of incentives is being offered under the scheme, including a land conversion fee, a power tariff, reimbursement for stamp duty and registration charges, a 25 percent capital subsidy on land, a 20 percent capital subsidy on plant and machinery, production-linked incentives at one percent of annual turnover, and exemption from electricity duty.
Additionally, Karnataka offers unique deals to businesses that bring in more than Rs 500 crore in investments. In 2021, the state of Karnataka introduced its ER&D Policy with the aim of creating a pool of trained individuals focused on research and luring engineering ER&D investments into the region.
While the State puts in its efforts, I wish to push forward a request to you for understanding the possibility for the Government of India to also enhance its funding support towards Karnataka," Kharge said.
Karnataka has implemented a strategy aimed at creating specialized and isolated clusters for the electronics industry around the state. The Hubli-Dharwad cluster is focused on consumer electronics, whereas Mysuru has been established as an aerospace and defence and PCB (printed circuit board) manufacturing cluster. The manufacturing of mobile phone components is the main focus of the Chikkaballapur cluster.
In addition, the region around Bangalore is intended to become a hub for the production of electric vehicles and cell phone assembly. Karnataka is currently developing two land parcels, namely Kochanahalli Industrial Area in Mysuru district and Kotur - Belur Industrial Area in Dharwad district, for the establishment of an electronics manufacturing cluster under the Government of India's Modified Electronics Manufacturing Cluster (EMC 2.0) scheme. The goal of these developments is to upgrade the current ecosystem and draw investments in the ESDM sector.
