Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)

SPECS scheme provides a 25 per cent financial incentive on capital expenditure to companies manufacturing electronic components, semiconductors, and display units in India. It helps offset manufacturing disability and strengthen the domestic electronics ecosystem under the Make in India scheme. New applications under the scheme were accepted from April 2020 until 31 March 2024, and the scheme now continues in its implementation phase, paying incentives to already approved projects.

Ministry of Electronics and Information Technology (MeitY) launched the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) to support domestic manufacturers. The scheme matches the National Policy on Electronics 2019, Digital India, and Make in India programmes. It gives a 25 per cent incentive of capital expenditure, on a reimbursement basis, to legal entities investing in electronic components, semiconductor or display fabrication, ATMP units, specialised sub-assemblies, and capital goods.

Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) - Overview

MeitY implements this scheme through a designated Nodal Agency that works as the Project Management Agency (PMA), with IFCI handling application receipt, appraisal, and incentive payment. An Executive Committee (EC), chaired by a Joint Secretary level officer, looks after the approval process. The scheme was notified on 1 April 2020 and remained open to new applications for three years, up to 31 March 2024.

As of 30 June 2024, incremental investment of about ₹8,803 crore had been made under SPECS. This led to production worth about ₹18,083 crore. The scheme keeps paying incentives to approved units over their investment period, so the benefit continues for projects that are already part of the scheme.

For companies looking to start fresh component manufacturing today, MeitY now runs the Electronics Component Manufacturing Scheme (ECMS). Notified on 8 April 2025, ECMS took over the role of supporting new investment in the components value chain, with its outlay raised to ₹40,000 crore in the Union Budget 2026-27.

Key Information

Benefits

Financial Incentive

Eligible units get a 25 per cent reimbursement on capital expenditure. This applies to both new units and the expansion, modernisation, or diversification of existing ones. Applicants may also gain from other government schemes, provided they have not claimed incentives for the same investment under the Modified Special Incentive Package Scheme (M-SIPS).

Eligible Capital Expenditure

Expenditure on the following is considered for the 25 per cent incentive:

• Plant, machinery, equipment, and associated utilities such as clean rooms, captive power, and IT or ITES infrastructure.
• Research and Development (R&D) including test instruments and design tools.
• Transfer of Technology (ToT) costs.
• Used or refurbished machinery, capped at 20 per cent of total plant investment and needing a 5 year residual life.

Expenditure on land, factory buildings, consumables, and raw materials is not covered. Specific sub-limits apply to R&D (20%), ToT (10%), and associated utilities (20% of plant and machinery costs).

Minimum Investment Thresholds

Eligibility

The scheme was open to any legal entity registered in India, including Private and Public Limited companies, Sole Proprietorships, Partnerships, and LLPs, who applied before the closing date of 31 March 2024. The main conditions were:

• Applicants must manufacture goods listed in the annexure of the SPECS Guidelines.
• The proposed investment must meet the minimum threshold specific to the product category.
• If an application covers multiple categories, the highest threshold among those categories applies.
• Applicants must give land documentation, meaning a registered lease or sale deed for at least 10 years.
• Financial closure, or commitment of funds including debt and equity, is required.
• There is no limit on the number of applications per entity or the number of locations.

Application Process

SPECS is no longer accepting new applications. The application window, which ran through the official portal at specs.ifciltd.com, closed on 31 March 2024. Companies that missed this window and want to set up component manufacturing can now look at the Electronics Component Manufacturing Scheme (ECMS), the successor scheme launched by MeitY in April 2025.

For the guidance of approved applicants, the earlier process worked as follows. STEP 1 - Register on the portal using the PAN and create the company profile. STEP 2 - Submit details of company structure, proposal, and investment plans, along with the required application fee based on project size. STEP 3 - The PMA checks the application for completeness within 15 working days. STEP 4 - If compliant, the PMA issues an Acknowledgement letter, which starts the 5 year investment window. STEP 5 - The EC reviews the appraisal report and gives final approval. STEP 6 - Once commercial production begins, claims are submitted every 6 months through the portal, and the PMA verifies at least 30 per cent of the capital expenditure before payment.

Documents

Approved applicants need to keep these documents ready for the incentive claim process: Certificate of Incorporation with MOA or AOA, audited financial reports for the last 3 years, GST registration and PAN details, board resolution approving the project and investment, evidence of financial closure such as bank sanction letters, a detailed list and quotations for capital goods, land ownership or lease documents, shareholding pattern certified by a Chartered Accountant, and integrity compliance undertakings.

References

• PIB Backgrounder on SPECS and Electronics Component Manufacturing Scheme 2026
• Official MeitY Website
• SPECS Application Portal

FAQ's

Is SPECS still accepting new applications?

No, new applications for SPECS were accepted only up to 31 March 2024. The scheme now continues in its implementation phase, paying incentives to projects that were already approved before the closing date.

What scheme should a new company apply to now?

Companies wanting to start fresh component manufacturing can apply under the Electronics Component Manufacturing Scheme (ECMS), launched by MeitY on 8 April 2025, with the outlay raised to ₹40,000 crore in the Budget 2026-27.

Does SPECS cover expenditure on land and buildings?

No, expenditure on land, building construction, raw materials, and consumables is not considered as eligible capital expenditure under the scheme.

How is the incentive paid to approved units?

Approved units submit claims every 6 months once commercial production starts. The PMA verifies at least 30 per cent of the capital expenditure before disbursing the 25 per cent reimbursement.

Are second-hand machines eligible?

Yes, provided they are not more than 20 per cent of the total plant and machinery expenditure and have a minimum residual life of 5 years.