Overview of the Computer and Hardware Industry
The growth and the scope of Information technology, or IT, have crossed everyone’s mind at some point. This sector has shown unprecedented growth, providing essential services needed to run the economy around the globe. A component that is very crucial to the development of this industry is the hardware it uses, i.e., computer and the peripherals that are needed to run these services. The computer and hardware manufacturing industry have also grown exponentially in the past two decades. While the IT industry needs Computer hardware, computer software, and data, the hardware sector is one of the significant components of the Information technology industry. Computer hardware refers to the parts of a computer and related instruments. Internal hardware devices include hard drives, motherboards, and RAM and external hardware devices include keyboards, mouse, printers, monitors and scanners. The internal hardware parts are referred to as components, while external hardware devices are usually called computer peripherals. Together, they all fall in the category of computers and hardware.
Computer and Hardware Industry in India
India is a price-sensitive market, and its unique socio-economic requirements drive substantial demand for cost-effective and robust computer and hardware products. There is a massive market for products that meet basic needs at penetration price points. A time existed when this market was dominated by products manufactured in other countries like China, Taiwan, South Korea, etc. But the initiatives and efforts brought by the government to promote computer and IT product manufacturing in the country itself through programs like Make in India initiatives significantly pushed the manufacturing and the demand for made-in-India computers and hardware devices. Moreover, in the past couple of years, computer and hardware manufacturing has seen a particular liking among budding entrepreneurs from IT, non-IT fields, and even the existing domestic electronic products manufacturers. The government has been introducing big IT-specific projects like the UIDAI, the National Knowledge Network, the National Optic Fiber Network, etc. To promote domestic manufacture in the hardware sector government launched various schemes like The Electronic Manufacturing Cluster Scheme, Modified Special Initiatives Package Scheme and Preferential Market Access Scheme. In 2021, Union Budget, the Finance Ministry allocated 7.31 billion USD towards the IT and telecommunications industries
Steps taken by Government to boost Computer Hardware Manufacturing
To position India at a global level in Electronics System Design and Manufacturing and to accomplish the vision of the National Policy on Electronics 2019, three schemes were introduced, by the government. The Production Linked Incentive Scheme (PLI) was one of these three schemes.The Modified Electronics Manufacturing Clusters Scheme (EMC 2.0) and Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) were the other two schemes notified in April 2020.
A first scheme, the Production Linked Incentive Scheme (PLI) for IT Hardware, is the latest scheme notified by the government in March 2021. India allows 100 per cent FDI in business and management consultancy services, computer consultancy services, data processing, technical testing services and market research services under the automatic route.
In addition, India allows 100 percent FDI in business-to-business( B2B) e-commerce to garner foreign capital and grow its IT software and hardware capabilities. From April 2000 to March 2021, India received FDI worth 71.05 billion USD in computer software and hardware manufacturing.
Licences and Authorisation needed by Computer and Hardware Industry
Every factory owner that falls under the definition of “factory” must register their premises with the local authorities under the Factories Act 1948 before commencing manufacturing. This documents needed approval from authorities to carry out manufacturing activities, include
- Duly filled in application form signed by Occupier and Manager
- Application Fees
- Existing building plan
- List of Partners/Directors with their residential address.
- NOC from partners or Board Resolution by Directors.
- Proof of Occupier as Director/ Proprietor / Partner of the factory.
- copy of electricity bill
- copy of rent agreement/ownership proof
- Flow chart of the manufacturing process
- List of raw materials used in manufacturing
- List of machinery installed or any other such particulars required by the Chief Inspector/Director
Bureau of Indian Standard (BIS) registration is necessary for all the electronics products that are sold in India, which are listed under the Compulsory Registration Scheme (CRS) governed by the government of India. It gives a third-party guarantee of the quality, safety, and reliability of products to customers. Documents needed in this regard are
- Self-certified copy of documents proving the establishment of the Firm (Registration with State Government and Trade Licence/ Certificate of Registration issued by Company Registrar/ Registered Partnership Deed in case the applicant is a Partnership Firm / Certificate from a Chartered Accountant if the applicant is a Proprietorship)
- Self-certified copy of documents authenticating the Firm's premises (not older than 3 months)
- Rent agreement with last rent receipt OR Sale/ Lease Deed agreement OR
- Electricity Bill/ Telephone Bill /Water Bill OR
- Bank Statement/Pass Book containing the address of the sales outlet
- Aadhar Card/ Driving Licence /PAN card
- Agreement on a non-judicial stamp paper of Rs 100/- in the prescribed format.
- Location map of premises from some nearest prominent landmark.
RoHS Compliance Certificate
Restriction of Hazardous Substances or RoHS compliance certificate seeks to prohibit the use of hazardous substances in electronic and electrical equipment (EEE). RoHS certification is mandatory for EEE producers in India. It is subjected to various legalities and technical documentation like reviewal of particular documents which is a crucial step to getting the RoHS certification. Documents needed at this stage are
- Bill of Materials
- Technical File
- Assembly drawings
- Materials declarations
- Test reports, and
- Specification/compliance certificates from all suppliers.
- Generic product information and description related to design structure.
- Risk evaluation of segments and subassemblies used
- Observations on raw materials, parts, and subassemblies.
- Documentation related to manufacturing and records of systematised standards, specifications, and compliance procedures.
The computer and Hardware Industry has to obtain a no objection certificate, also known as Consent NOC, from their respective State Pollution Control Board under the Air Act and Water Act. This NOC is generally provided in two stages, i.e. Consent to Establish (CTE) at the time of inception or establishment of the business and Consent to Operate (CTO) before the unit starts operating. The Board also conducts a site inspection to ensure that the unit has complied with protocols required for the facility and has installed necessary pollution control devices.
- Correctly filled application form of the concerned SPCB
- Signed undertaking
- Site or layout plan with a roadmap
- Detailed project report
- Details of the manufacturing processes and finished products.
- Proof of installed machinery and the capital cost of the land, building, and plant machinery)
- Water balance, water source and required quantity
- Land ownership documents such as rent/lease agreement
- Industry registration documents
- Consent fee (as applicable)
- Any other document mentioned in the application
This certificate is issued after the state authorities assess the structure and deem it safe from any potential hazard. Documents Required for Fire NOC from the respective State Fire Department include
- Building Plan Layout regarding the construction.
- Site Plan including the analysis report
- Aadhaar card and PAN card of the applicant
- Copy of Approval letter and Approved layout plan (each floor) by competent Authority.
- Copy of Approval letter and Approved Building plan (each floor)
- Building Fire Plans (each floor) / Elevation Plan of Building /Section Plan of Building.
- Copy of Ownership Document (Lease Deed / Registry (Summarised copy) / Khasra).
- Copy of Certificate of Fire Consultant Qualification
Scope and Market Overview of the Computer and Hardware Industry in India
Scope: The government plans to create a viable ecosystem to attract Indian and foreign companies to invest in the nation's electronics and IT hardware sector. This will involve the provision of fiscal incentives for investment, preferential market access to domestically manufactured electronic products, setting up of semiconductor wafer fabrication facilities and an industry-friendly and stable tax regime.
Market overview: Consumer and business demand for electronic and IT hardware products increased and touched 24 lakh crore in 2020. The import of electronic products touched 18 lakh crore. Many state governments are inviting entrepreneurs from this field to set up their manufacturing plants in their respective states by providing them with various incentives through Special Economic Zones. For instance, Andhra Pradesh has three dedicated special economic zones (SEZs) for the IT industry and is also home to over 20 per cent of India’s IT manufacturers. Similarly, Karnataka, which houses the country’s fourth largest technology cluster, has over 3,500 companies related to computer and IT and contribute over US$32 billion in exports. The Maharashtra state government has aided in developing 37 IT parks and approved 472 others. Similarly, Delhi, Tamil Nadu, and Telangana are the key IT manufacturing hubs in the country.
How will Enterclimate Assist You?
Meeting all formalities for your Manufacturing unit set-up
Enterclimate has a skilled team of experts in the licence and compliance domains. So, focus on your goals and leave all your legal obligations for obtaining the authorisation needed for setting up a computer hardware industry to us.
Industry-leading Service under one roof
You can be assured that complete guidance and answer to doubts and queries will be delivered to your satisfaction as we strive for perfection in our work. We assist our clients with all the necessary compliance at a reasonable cost through customised packages.
Assistance in difficulties arising throughout the process
At Enterclimate, we deliver quality with accuracy. We are known for our swift redressal of customer queries and end-to-end assistance in any related obligation arising throughout the application process.