Table of Contents
Glossary 1
List of Acronyms 3
Electronics Hardware Manufacturing Policy of Tamil Nadu, 2020 4
1. Vision, Mission and Objectives 4
Vision 4
Mission 4
Objectives 4
Priority sectors 5
2. Administration of Incentives 6
3. Financial Incentives 7
3.1. Financial Incentives for MSMEs 7
3.2. Financial Incentives for Large and Mega Categories 8
3.3. Financial Incentives for EMCs 10
3.4. Financial Incentives for Private ESDM park developers 10
4. Facilitation Measures 11
5. Research and Development Support 14
6. Skill Upgradation and Training 15
7. Exemption from Acts and Self Certifications 18
8. Start-ups and Venture Capital 19
Glossary
Definitions
Electronics Manufacturing Clusters (EMC): Under Modified Electronics
Manufacturing Clusters (EMC 2.0) Scheme notified vide Notification No.86
[CG-DL-E-01042020-218991] [F.No. 36(7)/2018-IPHW (Vol.II)] dated 1st
April, 2020 issued by the Ministry of Electronics and Information Technology,
Government of India; EMC Project would be an undeveloped / underdeveloped
geographical area, preferably contiguous, where the focus is on development of
basic infrastructure, amenities and other common facilities for the ESDM units.
Electronic System Design and Manufacturing (ESDM): The entire value
chain of all electronic verticals/ products covered under the National Policy
on Electronics and related notifications issued by the Ministry of Electronics &
Information Technology, Government of India and will also include computers
and peripherals, communication devices, electronic manufacturing services,
strategic electronics and its components, industrial electronics, automotive
electronics, telecom electronic equipment, information and broadcasting
electronic equipment, medical electronics, electronic gaming, solar PVs and
electronic toys.
EMS: Electronic Manufacturing Services - Key activities under EMS include
Engineering and design of PCBs; PCB assembly, including sub-assemblies;
Functional testing, Maintenance services such as warranty and repair services,
etc; Product and component design.
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FAB unit: FAB unit is Semiconductor fabrication plant where devices such as
Integrated Circuits (IC) chips are manufactured.
Investment in Eligible Fixed Assets (EFA): Investment in Eligible Fixed Assets
(EFA) means the investment made in building, plant and machinery and other
related fixed assets by eligible unit within the Investment period as defined by the
prevailing Industrial policy.
National Policy on Electronics, 2019 – The National policy on Electronics,
2019 notified by Ministry of Electronics and Information Technology (MeitY),
Government of India vide notification No.26(1)/2019-IPHW dated 25th February,
2019.
Start-up: As per the Government of Tamil Nadu’s Start-up and Innovation policy
2018-2023, an entity will be recognised as start-up only if it satisfies the following
conditions:
The company/entity is registered in the State under the Tamil Nadu Start-up
and Innovation Mission (TANSIM); and If it is incorporated as a private limited
company (as defined in the Companies Act, 2013) or registered as a partnership
firm (registered under section 59 of the Partnership Act, 1932) or a limited liability
partnership (under the Limited Liability Partnership Act, 2008) in India; and Up
to seven years from the date of its incorporation/ registration; however, in the case
of start-ups in the biotechnology, Artificial Intelligence (AI) & Machine Learning
(ML) sectors, the period shall be up to ten years from the date of its incorporation/
registration; and If its turnover for any of the financial years since incorporation/
registration has not exceeded Rs. 25 crores; Provided that any such entity formed
by splitting up or reconstruction of a business already in existence shall not be
considered a ‘Start-up’.
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List of Acronyms
Acronym Expansion
Bn Billion
CFC Common Facility Centre
EDII Entrepreneurship Development Institute of India
ELCOT Electronics Corporation of Tamil Nadu Limited
ELCOSEZ ELCOT SEZ
EMC Electronics Manufacturing Cluster
ESDM Electronics System Design & Manufacturing
FSI Floor Space Index
IC Integrated Circuits
IDC Inter Departmental Committee
GUIDANCE Tamil Nadu Investment Promotion Agency
LED Light Emitting Diode
MeitY Ministry of Electronics and Information Technology
MEC Mega Electropreneur Centre
MiEC Mini Electropreneur Centre
MSME Micro, Small and Medium Enterprises
NEM National Electronics Mission
National Initiative for Development and Harnessing
NIDHI
Innovations
NPE National Policy on Electronics
PCB Printed Circuit Board
R&D Research and Development
SEZ Special Economic Zone
Tamil Nadu Small Industries Development Corporation
SIDCO
Limited
SIPCOT State Industries Promotion Corporation of Tamil Nadu Limited
TANSIM Tamil Nadu Start-up Innovation Mission
USD United States Dollar
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Electronics Hardware Manufacturing
Policy of Tamil Nadu, 2020
1. Vision, Mission and Objectives
Vision
To transform Tamil Nadu into an innovative and a globally competitive Electronics
System Design and Manufacturing (ESDM) destination.
Mission
- Provide adequate infrastructure and supporting ecosystem to ESDM
companies
- Attract global major ESDM players to invest in Tamil Nadu
- Incentivize home-grown start-ups in the ESDM sector both in the component
and Original Equipment / product manufacturing subsectors
- Catalyse the growth of innovation led enterprises involved in the manufacturing
of hardware products & solutions
- To develop the semiconductor fabrication (FAB) industry in Tamil Nadu
Objectives
The following targets are set for Tamil Nadu Electronics & Hardware
manufacturing policy:
• To increase Tamil Nadu’s electronics industry output to USD 100 billion
by 2025
• To contribute 25% of India’s total electronic exports to the world by 2025
• To undertake skill training for more than 1,00,000 people (semi-skilled and
skilled) by 2024 to meet the incremental human resource requirement projected
by NSDC for Tamil Nadu in Electronics and Hardware Manufacturing sector
• To increase the level of value addition that is done in Tamil Nadu, especially
across focus sectors such as Mobile Handsets, LED Products, Fabless Chip
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Design, PCBs, Solar Photovoltaic Cells, Medical Electronics, and Automotive
Electronics
• To undertake a focused research and development program to achieve the
above objectives, and foster an environment of research and innovation
• To foster a conducive environment for ESDM Start-ups, especially promoting
the rapid growth of innovation-led technology enterprises involved in the
design, development and manufacturing of technologically advanced solutions
• To attract at least two major FAB investments to Tamil Nadu in the next
three years
Priority sectors
Aligned to the National Policy of Electronics 2019, Government of Tamil Nadu
shall provide special support for developing core competencies in the following
sub sectors:
• Semiconductor fabrication (FAB)
• Assembly, Test, Marking and Packaging (ATMP)
• Fabless Chip Design
• Medical Electronics
• Automotive, Aerospace and Aviation Electronics
• Power Electronics for Mobility
• Telecom/ Communication Equipment
• Consumer Electronics and Appliances
• Strategic Electronics
• Renewable Energy Electronics
• Electronic Manufacturing Services (EMS)
• Electronic Components Manufacturing
• Electronics Test and Calibration Labs
• Electronics Product Design & Intellectual Property (IP) registration
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Option to Select Policies
Investors may choose to avail incentives under any one policy of the state
government including this policy or the extant Industrial Policy or any other
applicable State Government Policy.
2. Administration of Incentives
All incentives offered by the Government of Tamil Nadu to ESDM units shall be
in addition to the incentives offered by the Government of India to those units.
Investments made from January 1, 2020 will be considered eligible for availing
incentives. The Government of Tamil Nadu, through its agencies, shall handhold
ESDM companies during the set-up stage and continue to assist them after the
setup has been completed.
I. For the purpose of administering state level incentives, classification of
districts in the state is as below:
Classification Districts
A Chennai, Tiruvallur, Kancheepuram and Chengalpet
Coimbatore, Cuddalore, Erode, Karur, Krishnagiri,
B Namakkal, Ranipet, Salem, Tiruchirapalli, Tirupattur,
Tiruppur, The Nilgiris, and Vellore
Dharmapuri, Madurai, Theni, Dindigul, Sivagangai,
Ramanathapuram, Virudhunagar, Tirunelveli, Thoothukudi,
C Kanniyakumari, Pudukottai, Ariyalur, Perambulur,
Tenkasi, Thanjavur, Thiruvarur, Kallakurichi, Viluppuram,
Mayiladuthurai, Nagapattinam and Tiruvannamalai
II. For the purpose of administering the financial incentives, the following
3 categories of investment and employment ranges have been considered:
“MSME” means a manufacturing unit, new or expansion, as defined by the
Ministry of MSME, Government of India from time to time.
“Large” means a manufacturing project, new or expansion, with the following
investment and employment range.
Category Investment range (in Rs. crores) Employment Range
Large 200 to 500 >500
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“Mega” means a manufacturing project, new or expansion with the following
investment and employment range.
Category Investment range (in Rs. crores) Employment Range
Mega >500 >2000
III. Governance mechanism
The incentives for MSME sector shall be sanctioned by the Commissioner of
Industries and Commerce.
The incentives for Large and Mega Industries shall be sanctioned by the
Industries department and the structured package shall be sanctioned as per the
recommendation of the Inter Departmental Committee (IDC) convened by the
Industries department and the related incentives will be disbursed by SIPCOT.
The single window facilitation for large & mega industries shall be done by
Guidance (https://investingintamilnadu.com/) through its single window portal
(https://www.easybusiness.tn.gov.in/).
The single window facilitation for MSME sector shall be done by the Commissioner
of Industries and Commerce & District Industries Center (https://easybusiness.
tn.gov.in/msme/).
3. Financial Incentives
3.1. Financial Incentives for MSMEs
The Government will formulate a special package of incentives for ESDM units
in the MSME sector. This will include Capital subsidy, Interest Subvention,
Low Tension Power Tariff Subsidy, Generator Subsidy, assistance for obtaining
intellectual property and assistance in obtaining certifications. MSMEs will also
be assisted to scale up their business to serve as vendor base for large and Mega
investors in this sector.
3.2. Financial Incentives for Large and Mega Categories
i. Capital Subsidy
Government of Tamil Nadu shall provide capital subsidy based on investment
ranges and location for new or expansion manufacturing units in Tamil Nadu.
Capital subsidy will be back ended and based on investment in Eligible Fixed
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Assets (EFA) as defined in the prevailing Industrial Policy, as detailed below:
Capital Subsidy
Category wise (as a percentage of EFA)
incentives Employment
“A” “C”
(Investment in Rs. Crs) “B” district
district district
Large (200 to 500) # 15% 20% 25% >500
Mega (≥ 500) # 18% 24% 30% >2000
#The capital subsidy will be disbursed in equal annual instalments in 12 years for
A districts and in 15 years in B and C category districts from the date of fulfilment
of Investment and employment criteria.
ii. Subsidy on Land Lease Cost
For eligible projects in ELCOT /SIPCOT/ SIDCO or any other government owned
industrial parks in C districts, land allotment will be made at 50% subsidised rate
for land up to 20% of EFA. For private land in C category districts, 50% subsidy
will be offered on cost of land as per guideline value up to an extent of 50 acres
and subject to land cost not exceeding 20% of EFA and a cap of Rs.2 crores. The
land cost will be excluded from the EFA calculation if this subsidy is availed.
Note: Subsidy for Private land will be eligible only if the land is purchased or
leased for the manufacturing unit within three years before commencement
of construction. This subsidy will be extended against an irrevocable Bank
Guarantee of an amount equal to the land subsidy, which will only be released
upon fulfilment of investment and employment conditions under the policy.
iii. Stamp Duty Exemption
50% stamp duty exemption will be given for purchase/lease
of land obtained from ELCOT / SIDCO/ SIPCOT.
In the case of private lands, stamp duty concession will
A&B districts
be given as 50% back ended subsidy for up to 50 acres
on fulfilment of investment and employment conditions
under this policy.
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100% stamp duty exemption will be given for purchase/
lease of land obtained from ELCOT / SIDCO/ SIPCOT.
In the case of private lands, stamp duty concession will
C Districts
be given as 100% back ended subsidy for up to 50 acres
on fulfilment of investment and employment conditions
under this policy.
iv. Training subsidy
Training subsidy of Rs. 4,000 per first time employee per month up to 6 months;
and Training Subsidy for Women of Rs. 6,000 per first time employee per month
can be availed up to 6 months. Training subsidy shall be disbursed from the actual
date of commercial production, but can be claimed for employees recruited and
trained before date of commercial production. This subsidy is provided only for
Native Residents of Tamil Nadu.
v. Interest Subsidy
Maximum 5% interest subvention on actual term loans capped
Large
to 0.2 Cr per annum for a period up to 6 years can be availed.
Maximum 5% interest subvention on actual term loans capped
Mega
to 1 Cr per annum for a period up to 6 years can be availed.
Interest Subsidy will be given against Corporate Guarantee, which will be released
upon fulfilment of employment and investment conditions under the policy.
vi. Exemption of Electricity tax
All new or expansion ESDM units will be given electricity tax exemption for a
period of 5 years from the date of commercial production on power purchased
from the Tamil Nadu Generation and Distribution Corporation (TANGEDCO)
or generated and consumed from captive sources.
vii. Environment Protection Infrastructure
Environment protection infrastructure like Dedicated Effluent Treatment Plants
(ETP) and / or Hazardous Waste Treatment Storage and Disposal Facilities
(HWTSDF) set up by individual manufacturing units would be eligible for an
Environment Protection Infrastructure subsidy and other incentives as per the
prevailing Industrial policy.
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viii. Subsidy for Intellectual Capital and Enhanced Quality Certification:
a. 50% subsidy on the expenses incurred for patent applications limited to a
maximum of Rs. 5 Lakh per application to a maximum of Rs 50 lakhs per
company
b. 50% subsidy on the expenses incurred for quality certifications such as
ISO, ISI, BIS, BEE and ECOMARKor any other national or international
certification up to Rs. 1 crore per company.
3.3. Financial Incentives for EMCs
EMCs shall be established in accordance to the Modified Electronics
Manufacturing Clusters (EMC 2.0) scheme issued by Government of India dated
1st April 2020. Apart from the assistance provided under the EMC2.0 scheme, the
state Government shall extend the following additional incentives to the project
implementation agency:
1. Subsidy on Land lease cost as per provision No. 3.2 (ii) of this policy
2. Stamp duty exemption as per provision No. 3.2 (iii) of this policy
3. Interest subsidy as per provision No. 3.2 (v) of this policy
4. Facilitation through the Single Window Portal of Guidance
3.4. Financial Incentives for Private ESDM park developers
The state Government will encourage development of Private ESDM parks with
common infrastructure, amenities and waste handling facilities. The developers
shall be eligible to apply for the following incentives prior to commencement of
the park and will be sanctioned by the state Government through the IDC. The
financial incentives shall be reimbursed to the developer subject to occupancy of
the park by ESDM units to a minimum extent of 75% of allottable area, no later
than four years from date of sanction of the package by IDC:
1. Reimbursement of Subsidy on Land lease cost (Amount as per provision No.
3.2 (ii) of this policy)
2. Reimbursement of Stamp duty (Amount as per provision No. 3.2 (iii) of this
policy)
3. Reimbursement of Interest subsidy (Amount as per provision No. 3.2 (v) of
this policy)
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4. Facilitation through the Single Window Portal of Guidance
Apart from the standard incentives mentioned above, the Government may in
its discretion, approve higher incentives/concessions and relax the conditions
mentioned in the policy for deserving projects giving due weightage to investment,
employment, value addition and potential for attracting further investment
through vendors and ancillaries.
4. Facilitation Measures
i. Ease of doing Business
All clearances that are required for setting up new ESDM units or expansion of
existing ESDM units under this policy shall be processed as per the Tamil Nadu
Business Facilitation Act 2017 via the Single Window Portal of Guidance.
ii. Land
Land shall be offered in ELCOT / SIDCO/ SIPCOT / notified Greenfield and
Brownfield EMCs / any other government owned industrial parks in A, B, C
districts by the Government of Tamil Nadu.
iii. Floor Space Index (FSI)
FSI shall be governed by of Tamil Nadu Combined Development and Building
Rules, 2019.
iv. Open Space Reservation (OSR)
• OSR shall be as per the provisions of Tamil Nadu Combined Development
and Building Rules, 2019.
• The treatment for OSR in ESDM units/EMC clusters/ESDM parks shall be in
accordance to Provision (3b) vide of GO. (Ms) No. 88 dated 13th March 2020
of Industries department which allows the developer to retain roads and open
spaces for the purpose of maintenance subject to conditions including access
to the public.
v. Infrastructure
• Government of Tamil Nadu will promote creation of EMCs through ELCOT,
SIPCOT, SIDCO and other agencies to provide world class infrastructure
facilities necessary to attract investment in ESDM sector including EMS and
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component manufacturing.
• Government of Tamil Nadu proposes to promote the development of EMCs
across the state by 2023, by providing single window clearances to all project
proposals by entrepreneurs. Some of the proposed EMCs include:
o Greenfield EMC in Hosur
o Greenfield EMCs in Chennai/Tiruvallur/Kancheepuram region;
o Brownfield EMCs in Sriperumbudur and Oragadam
o ELCINA industrial park as Brownfield EMC in Coimbatore region
• The EMCs shall provide internal and external infrastructure, inclusive of
multimodal logistics and shared testing and training facilities. Government
of India shall provide financial assistance for the creation of world class
infrastructure along with common facilities and amenities as per EMC 2.0
scheme. Government of Tamil Nadu shall extend support to investors through
various ease of doing business initiatives to avail GoI and GoTN incentives
and approvals, and develop complimentary external infrastructure on best
effort basis, such as roads, railways etc. ensuring proper connectivity between
the cluster and the appropriate transport gateway (airport/ seaport/ railways)
and supply chain centres.
• Government of Tamil Nadu will specifically facilitate on best effort basis:
o 4 or 2 lane road connectivity to the EMCs from the nearest national
highways/ state highways
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o Reliable power supply of required quantity by way of 230/110 kV
substations with power source from minimum of 2 different circuits to
provide redundancy
o Last mile water supply system and continuous good quality industrial
water supply to the EMCs
o Incentivize EMCs to establish testing and training centres within EMC by
treating them as part of EFA.
o Financial assistance for establishing testing and training centres within
the EMC
o High speed internet connectivity through the BharatNet and TamilNet
• Industrial parks developed by ELCOT, SIPCOT and SIDCO will have ready
built ‘plug- and-play’ facilities so that ESDM industries can commence
production immediately.
• Additionally, Government of Tamil Nadu through ELCOT shall strive to
promote electronic hardware manufacturing industries in the 8 existing
ELCOSEZs as well as market the remaining extent of land available in all the
ELCOSEZs at following locations:
1) Sholinganallur, Chennai
2) Vilankurichi, Coimbatore
3) Ilandhaikulam, Madurai
4) Vadapalanji, Madurai
5) Navalpattu, Tiruchirappalli
6) Gangaikondan, Tirunelveli
7) Jagirammapalayam, Salem
8) Viswanathapuram, Hosur
vi. Industrial Housing
The Government through ELCOT, SIPCOT and SIDCO will promote industrial
housing projects near existing and new ESDM hubs. The Government will also
promote bespoke industrial housing projects for the electronics industry based
on the demand and requirements given by a specific company or group of
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companies. The Government will use Tamil Nadu Shelter Fund and funds from
Government of India for industrial housing for this project.
vii. Promotion of Electronics Repair Parks & Facilities for E waste
management
The state accords high importance to circular economy and with this objective,
private investments in Development of Electronic repair parks with facilities for
e waste management shall be encouraged through viability gap funding/revenue
sharing mechanisms.
Government of Tamil Nadu shall strive to promote an Eco-park for processing
e-waste in an environmentally friendly manner in Public Private Partnership
(PPP) mode to integrate formal and informal operators.
viii. Promotion of Environment Protection Infrastructure within
Industrial Parks
Developers of Industrial Parks / SEZs / Industry clusters, etc. will be provided
incentives for development of Environment protection infrastructure as per
prevailing Industrial policy. Government shall encourage developers of Industrial
Parks / SEZs / Industry clusters, etc. to undertake large wastewater treatment and
recycling plants in the Public Private Partnership (PPP) mode for treating urban
sewage for industrial grade water supply. Industries shall be encouraged to use
treated water from municipalities and adopt measures for rainwater harvesting to
recharge the aquifers in the industrial areas.
5. Research and Development Support
i. Twin city agreements
To promote research and development in the electronics space, Tamil Nadu
Government through its investment promotion agency will strive to enter into
twin city agreements with electronics manufacturing cities in countries such as
Japan, Vietnam, South Korea, Taiwan, Israel, Singapore etc. Such agreements will
promote collaborations through exchange of experience and information, joint
cooperation plans, industry-specific programmes and projects, establishment
of joint expert groups, implementation of skill development programmes and
regular expert-level consultations.
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ii. University and Industry collaboration in R&D
The state shall strive to promote R&D in the ESDM sector in the state by encouraging
collaborations between industry units and technical institutions. In line with the
National Policy of Electronics 2019, the GoTN shall strive to promote research,
grassroots level innovations and early stage start-ups in emerging technology areas
such as 5G, IOT/ sensors, Drones, Artificial Intelligence (AI), Machine learning,
Augmented Reality (AR), Virtual Reality (VR), Additive manufacturing, Gaming
and Entertainment, photonics, nano-based devices as well as thrust areas such as
Medical Electronics, Defence Electronics, Automotive and Aviation Electronics,
Strategic Electronics, Power Electronics and Automation having major economic
potential, with a special focus on applying the outcomes, including frugal
solutions, to solve real life problems
iii. Common Facility Centres
The state shall encourage private sector participation for creation of at least one
common facility centre within greenfield/ brownfield EMCs with facilities such
as tool rooms, precision and testing centres, quality certification centre, repair
workshops, etc.
iv. Electronics Testing Centre
The Government of Tamil Nadu through ELCOT shall also establish a state-
of-the-art electronics testing facility preferably in an EMC to support start-ups,
industries, academia etc. involved in the ESDM sector.
6. Skill Upgradation and Training
i. Skill Development in Electronics System Design and Manufacturing
(ESDM) sector
Aligned to the Government of India’s Scheme for Financial Assistance for Skill
Development in Electronics System Design and Manufacturing (ESDM) sector,
Tamil Nadu shall target to skill over 1,00,000 persons each year for the next 4
years in five skilling levels. Tamil Nadu Skill Development Corporation shall
act as the State Implementing Agency (SIA) for implementing Schemes on Skill
Development in ESDM sector in Tamil Nadu.
A skill and training centre shall be established within every green-field/ Brownfield
EMC.
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ii. Collaborations with private sector
Tamil Nadu Skill Development Corporation shall collaborate with multinational
companies in the ESDM sector to conduct joint training programs and certification
courses.
iii. Train the trainer
Through sister-state agreements, the state government shall strive to implement
“Train the trainer” programs, and subsidize on case to case basis international
faculty travel and stay in India and expenditure incurred by Indian faculty for
training programs abroad, subject to a maximum expenditure of Rs. 2Lakh
through the Tamil Nadu Skill Development Corporation (TNSDC).
iv. Innovation centred Skills & Competencies Development
By combining the need to harness the latent innovation capacity within students
in higher technical education with the demand for upgraded capacity, curriculum,
and infrastructure to meet the skills and competencies development objectives,
the state aims to transform the latent talent pool available to fuel the growth of
the ESDM sector.
The state shall encourage the active promotion of an Innovation led approach
to technical education, achieving experiential learning through technology/
product prototyping activities, guided by technology practitioners and industry/
domain experts. The MEC and the MiECs proposed in this policy shall serve
as nodal centres to implement such curriculum linked skills and competencies
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development working in close association with the public and private institutions
in their vicinity. The state shall encourage the implementation of such programs
on a state wide basis with the recognition and guidance of Anna University or
other reputed institutions. The university is recommended to enable necessary
provisions in the engineering curriculum to facilitate the introduction of such
innovative models of learning, wherein the institutions engage with independent
research labs, incubators etc. to aid in effective implementation. Private sector
players in the ESDM sector are encouraged to join hands with private institutions
as partners to implement such skill development initiatives indicated above. The
state government shall offer financial incentives for such initiatives through the
Innovation Vouchers scheme launched by the Dept. of MSME and managed
by EDII-TN, and the said scheme shall be suitably modified to facilitate such
Innovation centred skill development programs.
v. Special Focus on Semiconductor Fabrication
The Government will take focussed efforts to promote the FAB industry in Tamil
Nadu. For this purpose, the Government will constitute a Special Task Force
to enable the creation of an appropriate eco system. Also, a special package of
incentives will be offered to investors in the FAB sector.
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7. Exemption from Acts and Self Certifications
• ESDM companies are exempted from the provisions of Chapter II and III of
the Tamil Nadu Shops and Establishments Act, 1947
• ESDM companies are exempted from the provisions of Section 5 (2) (a) (i)
and (ii) of the Tamil Nadu Industrial Establishment (National and Festival
Holidays) Act, 1958
• The Government of Tamil Nadu will allow self- certification, 3rd party
verification for labour related clearances and approvals under the following
acts of Labour Department in Tamil Nadu
o Tamil Nadu Shops and Establishment Rules, 1947
o Tamil Nadu Payment of Gratuity Rules, 1972
o Tamil Nadu Maternity Benefits Rules, 1964
o Tamil Nadu Contract Labour Rules, 1975
o Tamil Nadu Minimum Wages Rules, 1953
o Contract Labour Act, 1970
o Payment of Gratuity Act, 1972
o Tamil Nadu Industrial Establishment (National and Festival) Holidays
Act, 1958.
o Tamil Nadu Industrial Establishments (National and Festival)) Holidays
Rules, 1959
o Tamil Nadu Payment of Wages Rules, 1937
o Employment Exchange Act, 1959
o Equal Remuneration Act, 1976
o The Workmen’s Compensation Act, 1923
o Employees’ Provident Fund & Miscellaneous Provisions Act, 1952
• Self-certification by ESDM companies will be regarded as sufficient compliance
with the requirements of the different Acts and the Rules made there under
regarding the maintenance of registers and filing of the returns
• Flexibility in labour laws shall be adopted without compromising labour
welfare. Subject to applicable labour laws and within the parameters of the
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Industrial Employment (Standing Orders) Act, 1946 (Central Act 20 of 1946),
flexibility in employment conditions including flexible working hours for
women and shorter and longer duration of working hours, 24x7 operations
(3 shifts) employment of women in the night shifts
• The flexibility in working hours, working in three shifts and employment in
night shifts may be allowed for women employees, provided; all necessary
security arrangement, creche facilities for children, facilities of restroom and
safe transportations are arranged; the employers have to ensure that night
shift work may be carried out under the supervision of women supervisors
and ensure the presence of women security officers.
• E-filing of returns will be implemented progressively after all the offices of the
concerned Inspectors are computerized for receiving such returns to make
the process efficient, effective, and transparent and citizen- friendly.
• Government of Tamil Nadu will also take necessary action for introduction
of Common Annual Returns in place of multiple returns and reduction in the
number of registers maintained at present.
8. Start-ups and Venture Capital
Promoting Incubation and Seed Investments in Innovative Hardware
Products & Ventures
To catalyse higher growth of the ESDM sector, the GoTN recognizes the need
to provide the impetus to Electronics start-ups under the start-up policy of the
MSME department.
In line with the National Policy of Electronics 2019, the GoTN shall strive to
promote innovation of technologically advanced solutions leading to the
indigenous design and manufacturing of hardware products in the emerging
technology areas such as 5G, IOT/sensors, Bio sensors, Drones, Artificial
Intelligence-Machine Learning, Machine Vision, Augmented Reality (AR), Virtual
Reality (VR), Additive Manufacturing, Gaming and Entertainment, photonics,
Electric Mobility, Nanotechnology devices as well as thrust areas such as Medical
Electronics, Defence Electronics, Automotive/Aviation/Aerospace Electronics,
Strategic Electronics, Power Electronics, and Automation paving way for the rise
of world-class products to emerge from the ESDM sector in Tamil Nadu.
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To realise this vision, GoTN shall provide support through the following enabling
provisions in the state’s policy:
i. Establishment of world-class Product Innovation, Design and
Development facilities
Through this policy, the state government proposes to bring greater thrust into
the establishment of world-class infrastructure and facilities for hardware product
innovation & design, with the requisite equipment, resources and expertise
offered for hardware & electronics product design, specifically facilitating
desktop manufacturing and assembly required for low-volume production of
pre-commercial designs of industrial grade hardware solutions. To do so, it
is proposed to establish a state-wide Hardware Product Innovation Network
consisting of several standalone centres operating in a hub-and-spoke model.
The network shall include a Mega Electropreneur Centre (MEC), that will be
setup by ELCOT and established in the form of a Centre of Excellence (CoE) for
Hardware Products & Ventures to facilitate easy access and to make it practical to
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build a robust ecosystem for start-ups and entrepreneurs. This CoE shall include
a fully self-contained facility to support end-to-end design, development, testing
& certification of innovative hardware products.
As an extension of this central node it is proposed to establish Mini Electropreneur
Centre (MiEC) shall be setup by ELCOT in each of the existing and future
ELCOSEZs to scale up the footprint of innovation activities to further boost the
generation of new hardware and electronics systems, products and solutions.
These innovations shall be centred around solving local challenges sourced from
the industry, society, or government and shall be undertaken by students in the
neighbouring science, engineering and polytechnic institutions, serving as a
major boost to skills and competencies development.
Each of these MiECs shall provide necessary office facilities for innovators and
start-ups to operate, apart from offering the essential technical infrastructure in
the form of innovation labs covering equipment, tools, and other resources apart
from access to technical training, support and expertise. The centre shall offer
on a self-contained basis all requisite resources for innovators coming up with
innovative new hardware product ideas to rapidly develop product prototypes
ready for completing customer/field trials, test and certification, and become
ready for the first batch of factory manufactured units. This centre shall also serve
as the ‘Rapid Product Prototyping Lab’ for the enterprises operating in the
ELCOSEZ, made available on a subsidized rental/subscription basis. In addition,
this centre shall also serve as a Skills Development Hub on the lines described in
the section further below on skills upgradation and training.
ii. Financial support for operating Incubation and Acceleration Programmes
The state shall encourage the implementation of Hardware start-ups focused
accelerator programs combined with Seed capital investments, and shall provide
financial assistance in the form of complementary funds offered to mature
Technology Business Incubators in TN, which shall avail financial assistance
from the schemes such as TIDE 2.0 scheme launched by MeitY Start-up Hub,
Govt of India, NIDHI TBI, NIDHI CoE, NIDHI Accelerator, NIDHI PRAYAS
and/or NIDHI EIR schemes launched by Dept of Science and Technology, Govt.
of India. The support from GoTN shall be used to augment the operating funds
sourced by these incubators.
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iii. Innovation Grants & Seed Capital Investments for Hardware Products &
Ventures
The state shall adopt an Investment Portfolio approach covering Innovation
Grants (grants for prototyping stage hardware product innovators), Start-up
Grants (grants for advanced prototyping stage and market entry stage hardware
products), and Seed Capital (financial support in the form of Convertible Debt
implemented through the Convertible Note or CCPS instruments or in the form
of Equity investments). This scheme will be implemented through EDII-Tamil
Nadu under the aegis of the TANSIM policy implementation framework.
ELCOT will also support start-ups in the electronics and hardware space in the
following ways:
• Promote the development and acquisition of IPs in ESDM sector
• Support well-functioning ATAL Tinkering Labs for procurement of new
electronic equipment.
• Establish a cloud server to connect all the incubation centres across the State
and make it available to all the start-ups, at low or nominal costs.
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