Lok Sabha Question No. 6423 (UNSTARRED), answered on 2017-04-12
Subject: Printed Circuit Boards
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: RAKSHA NIKHIL KHADSE

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO.6423

TO BE ANSWERED ON 12.04.2017

## PRINTED  CIRCUIT BOARDS

## 6423.       SHRIMATI RAKSHATAI KHADSE:

Will the Minister of Electronics and Information Technology be pleased to state:

- (a) whether the Government proposes to promote manufacturing of critical components like Printed  Circuit  Board  (PCB)  or  populated  PCB  to  achieve  the  dream  of  net  zero imports; and
- (b) if so, the details thereof and the steps taken by the Government in this regard?

## ANSWER

MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI P.P. CHAUDHARY)

- (a):    Yes, Sir.
- (b):    Steps  taken  by  the  Government  to  promote  manufacturing  of  critical  components  like Printed Circuit Board (PCB) or populated PCB in the country are enclosed at Annexure .

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## Annexure

Steps taken by the Government to promote manufacturing of critical components like Printed Circuit Board (PCB) or populated PCB in the country

1. To offset disability and attract investments in electronics manufacturing, Modified Special Incentive Package Scheme (M-SIPS)  was  launched  by  the  Government  in  July  2012.  The  scheme  has  been  extended  from  time  to  time  with procedural simplifications and expansion of scope of new product categories. Recently, certain amendments in the MSIPS policy have been notified on 30.01.2017 with a view to expedite investments in electronics manufacturing. The scheme  along  with  the  amendments  is  available  in  public  domain  at  http://meity.gov.in/esdm.  The  scheme  mainly provides 20-25% subsidy for investments in capital expenditure for setting up of electronics manufacturing facility. It also provides for reimbursement of CVD/Central Excise Duty on porcured capital equipment for the non-SEZ units. The incentives are available for 44 categories of electronic products and components thereof, including manufacturing of  PCBs.  The  applications  will  be  received  till  31.12.2018  or  till  such  time  that  the  incentive  commitment  reaches Rs.10,000 Crores, whichever is earlier. The incentives will be available for a period of 5 years from the date of approval of the application. Under the M-SIPS, 19 applications have been received for manufacture of bare PCBs involving a proposed investment of Rs.1,277 Crores.
2. Following tariff related measures have been taken for promotion of indigenous manufacturing of PCBs:
3. 2.1 Bare PCBs are covered under the Information Technology Agreement (ITA-1) of WTO and hence are exempted from Basic Customs Duty (BCD). To avoid inverted tariff structure, all inputs for manufacture of PCBs are also exempted from  BCD,  subject  to  actual  user  condition.  Specified  capital  goods  for  the  manufacture  of  bare  PCBs  are  also exempted from BCD.
4. 2.2 To promote indigenous manufacturing of populated PCBs, following measures have been taken:
5. (i) Special Additional Duty of Customs (SAD) has been exempted on all goods (except populated PCBs) for use in the manufacture of ITA-1 bound goods, subject to actual user condition.
6. (ii) In  Budget  2016-17,  the  differential  Central  Excise  Duty  dispensation  made  available  to  mobile  handsets/  tablet computers has been extended certain identified  electronic equipments such as Routers, Broadband modems, Set-top boxes for gaining access to internet, Set-top boxes for TV, Digital Video Recorder (DVR) / Network Video Recorder (NVR), CCTV Camera / IP Camera and Lithium-ion batteries (other than those for mobile handsets including cellular phones). However, these will be charged Central Excise Duty of 4% (without input tax credit) or 12.5% (with input tax credit), while Countervailing Duty (CVD) on imports shall be 12.5% where input tax credits are not claimed, parts, components and accessories (except populated PCBs) of the  following equipment have been exempted from BCD, Countervailing Duty  (CVD)/ Excise Duty and SAD namely:-
7. Routers,  Broadband  modems,  Set-top  boxes  for  gaining  access  to  internet,  Set-top  boxes  for  TV,  Digital  Video Recorder (DVR) / Network Video Recorder (NVR), CCTV Camera / IP Camera and Lithium-ion batteries (other than those for mobile handsets including cellular phones)
8. (iii) In Budget 2017-18, 2% concessional SAD has been imposed on populated PCBs for use in the manufacture of mobile handsets, subject to actual user condition. The concessional SAD will be valid till 30.06.2017.
9. 2.3  Specified  inputs  and  specified  capital  goods  for  the  manufacture  of  specified  electronic  components,  including semiconductor devices, are also exempted from BCD, subject to actual user condition.
3. Electronics Manufacturing Clusters (EMC) Scheme provides financial assistance for creating world-class infrastructure for electronics manufacturing  units.  The  assistance  for  the projects for setting  up  of  Greenfield  Electronics Manufacturing Clusters is 50% of the project cost subject to a ceiling of Rs.50 Crore for 100 acres of land. For larger areas, pro-rata ceiling applies. For lower extent, the extent of support would be decided by the Steering Committee for Clusters (SCC) subject to the ceiling of Rs.50 Crore. For setting up of Brownfield Electronics Manufacturing Cluster, 75% of the cost of infrastructure, subject to a ceiling of Rs.50 Crore is provided.
4. Approvals  for  all  foreign  direct  investment  upto  100%  in  the  electronic  hardware  manufacturing  sector  (including electronic components) are under the automatic route.
5. Policy for providing preference to domestically manufactured electronic products in Government procurement is under implementation.
6. For promotion of exports in the sector, Merchandise Exports from India Scheme (MEIS) and Export Promotion Capital Goods (EPCG) Scheme are available under the Foreign Trade Policy, 2015-20. MEIS offers export incentives so as to offset disabilities of manufacturing. The export incentive for electronic goods is available     @ 2% of FOB value of
14. export.  Zero  duty  EPCG  scheme  allows  import  of  capital  goods  at  zero  customs  duty,  subject  to  specified  export obligation.
7. Under the Electronics Hardware Technology Park (EHTP) Scheme, approved units are allowed duty free import of goods required by them for carrying on export activities, CST reimbursement and Central Excise duty exemption on procurement of indigenously available goods, as per the Foreign Trade Policy.
8. A National Centre of Excellence in Large Area Flexible Electronics (NCFLEX) has been set up in IIT-Kanpur with the objective  to  promote  R&D,  Manufacturing,  ecosystems,  Entrepreneurship,  International  Partnerships  and  desktop Human Resources as well as  prototypes in collaboration with industry for commercialization.

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