The Department of Electronics and IT of the Government of India has given its in-principle approval for the creation of an ‘electronic manufacturing cluster’ in the Sri City industrial township, near Chennai.

The Department runs a scheme that gives ₹50-crore grant for developing the infrastructure for such a cluster, on the condition that the minimum area would be 100 acres and the cluster attracts at least ₹200 crore of investment. The government’s approval was received a few days back, an official of Sri City (P) Ltd, said.

The company, which has developed and operates the 7,000-acre industrial-cum-residential township (a third of which is occupied) on the Andhra Pradesh-Tamil Nadu border some 55 km north of Chennai, has carved out a 100-acre piece of land within the zone for the cluster.

The government grant will reimburse half the costs that Sri City incurs in building roads and utility connections in the cluster zone, up to a ceiling of ₹50 crore.

Incidentally, the government has notified 60 electronics manufacturing clusters in the country.

Business enquiries

An official of Sri City said that the company has received “very serious enquiries” from a couple of Indian companies to set up units in the zone. He didn’t name them, but said they were suppliers to large electronics manufacturers.

The grant will help Sri City’s push to get electronics units to set up units in the township. In the seven years since it began offering developed plots on 99-year lease, Sri City has attracted 102 units from 26 countries and these units have invested ₹20,000 crore. They include marquee tenants such as Cadbury’s, Kellogs, Pepsi, Alstom, Colgate-Palmolive, Isuzu, Kobelco – “12 companies with global turnover of $12 billion each,” as Sri City’s promoter Ravi Sannareddy puts it.

But there are not many electronics manufacturers. Sri City wishes to correct this and capitalise on the government’s keenness to get more electronics manufacturing in the country. The demand for electronics products would be $400 billion by 2020, when the local production would only be $104 billion, from $45 billion now. The extant Modified Special Incentive Package Scheme, or M-SIPS, offers 25 per cent reimbursement of capital expenditure, incidentally, expires on July 26 this year.

M-SIPS covers solar cells and modules and given the government’s drive for local manufacture, there could be scope to attract investments into the cluster, officials said.

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