Tamil Nadu releases new Electronic Hardware Manufacturing Policy 2020

The policy aims to increase Tamil Nadu's electronics industry output to $100 billion by 2025 and make the state contribute 25 percent of India's total electronic hardware export by 2025.

Created On: Sep 8, 2020 11:37 ISTModified On: Sep 8, 2020 11:43 IST
Tamil Nadu CM

Tamil Nadu Chief Minister Edappadi Palaniswamy on September 7, 2020 released the state’s new Electronic Hardware and Manufacturing Policy-2020. The policy is aimed at increasing the state's electronics industry output to $100 billion by 2025. 

The policy envisages to make the state contribute 25 percent of India's total electronic hardware export by 2025. It aims to attract semiconductor fabrication units to the state.

The policy will undertake skill training of over 100000 semi-skilled and skilled people by 2024 to meet the incremental human resource requirement, which was projected earlier by NSDC for Tamil Nadu's Electronics and Hardware Manufacturing sector. 


Tamil Nadu's Electronic Hardware and Manufacturing Policy-2020 aims to increase the level of value addition that is done in Tamil Nadu, especially across four sectors including LED products, mobile handsets, PCBs, chip designs, solar photovoltaic cells, automotive electronics and medical electronics. Through the policy, the state government will provide special support to developing core competencies in the sub sectors.

Electronic Hardware and Manufacturing Policy-2020: Key Features

Tamil Nadu's new Electronic Hardware and Manufacturing Policy-2020 aims to provide: 

- 30-percent capital subsidy
- 50 percent grant for taking land on lease
- 5-percent interest grant for term loans
- Monthly financial aid for the first-time trainees in the sector for six months at the rate of Rs 4,000 for men and Rs. 6,000 for women

Special Package for MSME Sector

•  The new electronic hardware and manufacturing policy will aim to foster a conducive environment Electronics System Design and Manufacturing (ESDM) Start-ups, especially promoting the rapid growth of innovation-led technology enterprises involved design, development and manufacturing of technologically advanced solutions.

•  The state will form a special package of incentives for ESDM units in the MSME sector under the policy, which will include capital subsidy, low tension power tariff subsidy, interest subvention, generator subsidy, assistance in obtaining certifications and assistance for obtaining intellectual property.

•  The state will also promote the acquisition of IPs in ESDM sector and provide support to ATAL Tinkering Labs for procurement of new electronic equipment and establish a new cloud server to connect all the incubation centres across the state, making it available to all the start-ups at low or nominal costs.

•  The MSMEs will also be provided with the required support to scale up their business to serve as a vendor base for large and mega investors in this sector.

The policy has identified districts in three categories for core investments:

a) For investments worth Rs 200-500 crore- Capital subsidy in category A district would be 15 per cent, category B district would be 20 percent and category C district would be 25 percent.

b) For investments over Rs 500 crore- Capital Subsidy in category A district would be 18 percent, B district would be 24 percent and C district would be 30 percent. 

c) For eligible projects in ELCOT /SIPCOT/ SIDCO or any government-owned industrial park in category C districts- The land allotment will be done at 50 percent subsidised rate for land up to 20 percent of EFA.

Other Focus areas:

•  The policy aims to undertake a focused research and development program to achieve the above objectives and attract at least two major FAB investments to Tamil Nadu in the next three years.

•  As per the policy, all incentives offered by the state to units in the electronics manufacturing industry will be in addition to the incentives offered by the centre to those units.

•  Besides, the investments made from January 1, 2020 will be considered eligible for availing incentives.

•  The state has also announced stamp duty exemption, interest subsidy, training subsidy, exemption of electricity tax, subsidy for intellectual capital and environmental protection infrastructure under the policy.

Mega Electropreneur Centre (MEC)

Tamil Nadu is also planning to set up a Mega Electropreneur Centre (MEC) as a Centre of Excellence for Hardware, Products and ventures to facilitate easy access and build a robust ecosystem for start-ups and entrepreneurs.

The centre of excellence for hardware will include a fully self-contained facility, which will aim to support end-to-end design, development, testing and certification of innovative hardware products.


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