Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)"
Ministry: Ministry of Electronics and Information Technology
The scheme aims to offset the disability for domestic manufacturing of components and semiconductors to strengthen the electronics manufacturing ecosystem. Through this scheme, a financial incentive of 25% on capital expenditure to legal entities registered in India.
About This Scheme
Benefits
> Financial Incentive:
A financial incentive of 25% of eligible capital expenditure is provided to approved units manufacturing goods as per the eligible list annexed to the Scheme.
The total incentive under the Scheme is 25% of eligible capital expenditure for an approved application.
The incentive is over and above any incentive offered by the State Government or any of its agencies or local bodies.
Applicants shall also be eligible to take benefit under any other scheme(s) of the Government of India; however, investments committed under the Modified Special Incentive Package Scheme (M-SIPS) for which incentives have been claimed shall not qualify as eligible investments under SPECS.
> What Constitutes Eligible Capital Expenditure
Capital expenditure includes the following:
Expenditure on plant, machinery, equipment and associated utilities — including tools, dies, moulds, jigs, fixtures (including parts, accessories, components, and spares thereof); expenditure on packaging, freight/transport, insurance, and erection and commissioning. Associated utilities include captive power and effluent treatment plants; clean rooms; air curtains; temperature and air quality control systems; compressed air, water and power supply; and IT/ITES infrastructure related to manufacturing including servers, software and Enterprise Resource Planning (ERP) solutions.
Expenditure on Research and Development (R&D) — including in-house and captive R&D, test and measuring instruments, design tools, software cost (directly for R&D), and expenditure on technology, Intellectual Property Rights (IPR), patents and copyrights.
Expenditure on Transfer of Technology (ToT) — including cost of technology and initial technology purchase related to eligible goods.
Expenditure on refurbished/used/second-hand plant, machinery and equipment (including associated utilities and R&D) — whether imported or domestically procured — not exceeding 20% of total eligible plant, machinery and equipment. Such equipment must have a minimum residual life of at least 5 (five) years at the time of transfer of assets.
The following are NOT covered as eligible capital expenditure
Expenditure on land and building (including factory building/construction).
Expenditure on consumables and raw materials used for manufacturing.
> Sub-Limits within Eligible Capital Expenditure
Associated utilities expenditure: capped at not more than 20% of the total eligible capital expenditure for plant, machinery and equipment.
Research and Development (R&D) expenditure: not exceeding 20% of the total eligible capital expenditure for plant, machinery, equipment and associated utilities.
Transfer of Technology (ToT) expenditure: not exceeding 10% of the total eligible capital expenditure for plant, machinery, equipment and associated utilities.
Refurbished/used/second-hand plant, machinery and equipment: not exceeding 20% of total eligible capital expenditure.
> Eligible Goods and Minimum Investment Thresholds
₹5.0 Cr
CategoryDescription of GoodsMinimum Investment ThresholdASurface Mount Technology (SMT) components including Light Emitting Diode (LED) Chips; Chip Modules for Smart Cards, Radio Frequency Identification (RFID) Antenna and Labels, Chip-on-Board (CoB)/System in Package; Passive components (resistors, capacitors, ferrites) for electronic applications; Electromechanical components (transformers, inductors, coils, relays, switches, micro motors, stepper motors, Brushless Direct Current (BLDC) Motors, Connectors, Heat Sinks, Antenna, Speakers, Microphones, etc.) for electronic applications; Magnetrons, Wave guides, Circulators, Couplers, Isolators, Filters, Magnets, Radio Frequency (RF) Components for electronic applications; Printed Circuit Boards (PCBs), PCB Laminates, Prepegs, Photopolymer films, PCB Printing Inks; Printed Flexible Electronics; Sensors, Transducers, Actuators and Crystals for electronic applications; Camera Modules, Vibrator motor/ringer; Universal Serial Bus (USB)/Data Cables, High-Definition Multimedia Interface (HDMI) Cables; Capital goods for all goods covered under SPECS.₹5,00,00,000/- (₹5 Crore)BActive Components — Discrete semiconductor devices (transistors, diodes, etc.); Power semiconductors (Field Effect Transistors (FETs), Metal Oxide Semiconductor Field Effect Transistors (MOSFETs), Thyristors, etc.); Preform of Silica and Optical Fibre; Display Assembly and Touch Panel/Cover Glass Assembly.₹15,00,00,000/- (₹15 Crore)CMicro/Nano-electronic components such as Micro Electro Mechanical Systems (MEMS) and Nano Electro Mechanical Systems (NEMS); Assembly, Testing, Marking and Packaging (ATMP) units.₹25,00,00,000/- (₹25 Crore)DMechanics (plastic and metal parts) for electronic applications.₹75,00,00,000/- (₹75 Crore)ECompound Semiconductors such as Gallium Nitride (GaN), Silicon Carbide (SiC), Gallium Arsenide (GaAs), and Silicon Photonics devices/Integrated Circuits, Optoelectronic components.₹2,50,00,00,000/- (₹250 Crore)FSemiconductor Wafers.₹5,00,00,00,000/- (₹500 Crore)GSemiconductor Integrated Chips (ICs), including Logic [Microprocessors, Microcontrollers, Digital Signal Processors (DSP), Application Specific Integrated Circuits (ASICs), etc.]; Memory; Analogue/Mixed Signal ICs, etc. Display fabrication units including Liquid Crystal Displays (LCD), Light Emitting Diode (LED), Organic Light Emitting Diode (OLED), etc., for electronic applications.₹10,00,00,00,000/- (₹1,000 Crore)
Eligibility
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
- •
Required Documents
- ✦Certified Copy of Memorandum of Association (MOA) and Articles of Association (AOA) or Equivalent Registration Document. (In case of Sole Proprietorship, any document deemed appropriate.)
- ✦Statutory Auditor / Company Secretary Certificate showing Shareholding Pattern (indicating number of shares and investment).
- ✦Chartered Accountant (CA) Certified Copies of Permanent Account Number (PAN) and Goods and Services Tax (GST) Certificate.
- ✦Self-Certified Copies of Brief Profile of Chairman, Chief Executive Officer (CEO), Chief X Officers (CXOs), Directors, Key Managerial Persons (KMPs), Key Promoters, and Authorised Representatives along with their PAN / Director Identification Number (DIN).
- ✦Chartered Accountant (CA) Certified Copies of Annual Reports including Annual Financial Reports along with schedules for the past 3 years (most recent reports to be provided).
- ✦Certificate from Company Secretary / Board of Directors regarding Credit History — details of presence of Applicant / Non-Independent Directors / Promoters in Reserve Bank of India (RBI) Defaulter and Wilful Defaulter Lists, Securities and Exchange Board of India (SEBI) Debarred List, and Credit Information Bureau (India) Limited (CIBIL) Score.
- ✦True Certified Copy of Board Resolution highlighting proposed products, investment schedule from different sources (term loan, unsecured loan, equity, etc.), intent to invest under SPECS, and project location.
- ✦Chartered Accountant (CA) Certified Copies of Annual Reports for the past 3 years (in Microsoft Excel format).
- ✦For Term Loan: Sanction Letter; Loan Agreement; Appraisal Note; Loan Account Statement (if disbursed).
- ✦For Internal Accruals: Documents supporting fund availability.
- ✦For Equity: Documents supporting fund availability; Equity Subscription Agreement; Commitment Letters from equity providers.
- ✦For Unsecured Loan: Documents supporting fund availability; Unsecured Loan Agreements; Commitment Letters from unsecured loan providers.
- ✦Company Secretary Certified Copy of the Sanction Letter and Term Loan Agreement for Debt.
- ✦Company Secretary Certified Copy of Board Resolution for Equity / Unsecured Loans (or equivalent for other legal entities/proof of equity / unsecured loans having been brought in).
- ✦Complete List of Capital Goods proposed to be purchased along with their Quotations and Purchase Orders (where a purchase order is issued).
- ✦Details of Used / Second Hand / Refurbished Plant, Machinery, Equipment and Associated Utilities (if applicable).
- ✦Copy of Technology Agreements with Technology Provider (if applicable).
- ✦Documentation showing Ownership of Land (Leased / Owned) for the Project.
- ✦Documentation showing Possession of the building (Leased / Owned) for the Project.
- ✦Registered Sale Deed and/or Registered Rent / Lease Agreement on the Land for a period of not less than 10 years from the date of application, along with documents showing the location is in an industrial area.
- ✦Chartered Accountant Certificate (with Membership Number) showing Shareholding Pattern (indicating number of shares and investment).
- ✦Self-Certificate that the applicant is not blacklisted by any Government Department.
- ✦Undertaking stating details of Assistance Sought / Received from the Government of India apart from SPECS.
- ✦Undertaking a number of Proposed Manufacturing Set-Ups.
- ✦Employment Generation Details.
- ✦Year-Wise Production Capacity till Project Completion.
- ✦Implementation Schedule with timelines for: Construction of Building; Ordering of Machines; Receipt and Installation of Machines; Pilot Production; and Commercial Production.
- ✦Overview of Manufacturing Process along with Key Raw Materials.
- ✦Proof of Application Fee Submission (non-refundable, paid electronically).
- ✦Integrity Compliance Undertaking — Format-A (to be provided by all applicants whose applications or claims are under consideration for approval or disbursement of incentive) and Format-B (to be provided after submission of claims for disbursement and before release of funds) — duly signed by Chief Executive Officer (CEO) / Managing Director (MD) / Director.
✦ Required ◦ Optional
How to Apply
Section 1: Applicant Details (company structure, company details, credit history, financial details); Section 2: Proposal (eligible goods, projections, size of investment, financial closure details, operations and facilities analysis, market research on product feasibility, regulatory treatment); Section 3: Application Fee Details (proof of application fee submission).
Quick Info
- Level
- Central Government
- Max benefit
- ₹5.0 Cr