Lok Sabha Question No. 2203 (UNSTARRED), answered on 2017-03-15
Subject: Electronics Industry in India
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: RATTAN LAL KATARIA

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED  QUESTION NO. 2203

TO BE ANSWERED ON 15.03.2017

## ELECTRONICS INDUSTRY IN INDIA

## 2203         SHRI   RATTAN  LAL  KATARIA:

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

- (a) whether electronics industry is the largest and most rapidly growing industry in the world;
- (b) if so, the rank of India among the major electronics industries of the world;
- (c) whether high growth in the electronics industry have become possible due to the increasing rate of income and increasing demand of people;
- (d) if so, the details thereof;
- (e) whether Indian electronics industry is under threat from Chinese  electronics industry; and
- (f) If so, the strategy adopted by India to face the challenge?

## ANSWER

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

(a) to (d): The growth rate of electronics hardware industry in the world was higher than the overall growth  of  world  manufacturing  in  2016.  The  world  production  of  Electronics  is  estimated  to  be  2 trillion  USD.  India  is  a  net  importer  of  electronic  products  and  does  not  figure  among  the  major producers or exporters of electronics in the world. In general, it is seen that as an economy grows, with a rise in per capita income, there is also an increase in the consumption of electronic products, including electronic  consumer  durables.  With  the  continuing  rise  in  application  of  electronics  and  associated technologies in a wide range of areas, the consumption of electronic products is likely to continue to rise in the foreseeable future.

(e)  and  (f): At this juncture, India imports  electronic products to the tune of 40 billion USD, of which, China accounts for  a significant proportion. As per the available figures, the share of China in total import of electronics into India was about 55 per cent in 2015-16. The Government has adopted various measures  to  encourage  the  production  of  electronic  goods  under  the  'Make  in  India'  strategy.  Steps taken  by  the  Government  for  promoting  indigenous  manufacturing  of  electronic  goods  are  listed  at Annexure .

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Annexure

## Steps taken by the Government to promote indigenous manufacturing of electronic goods

1. Promotion of electronics hardware manufacturing is one of the pillars of Digital India campaign of the Government.
2. The  National  Policy  on  Electronics  (NPE  2012)  was  notified  in  October  2012  with  the  vision  to  create  a  globally competitive  electronics  design  and  manufacturing  industry  to  meet  the  country's  needs  and  serve  the  international market.
3. Modified  Special  Incentive  Package  Scheme  (M-SIPS)  provides  financial  incentives  to  offset  disability  and  attract investments  in  the  Electronics  Systems  Design  and  Manufacturing  (ESDM)  sector.  The  scheme  was  notified  in  July

2012. The scheme provides subsidy for investments in capital expenditure - 20% for investments in SEZs and 25% in non-SEZs. The scheme is available for both new projects and expansion projects. For high technology and high capital investment units like Fabs, production subsidy @10% is also provided.

4. 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.
5. Policy for providing preference to domestically manufactured electronic products in Government procurement is under implementation.
6. Approvals for all foreign direct investment up-to 100% in the electronic hardware manufacturing sector are under the automatic route.
7. 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 export.  Zero  duty  EPCG  scheme  allows  import  of  capital  goods  at  zero  customs  duty,  subject  to  specified  export obligation.
8. 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 excise duty exemption on procurement of indigenously available goods, as per the Foreign Trade Policy.
9. Tariff  Structure  has  been  rationalized  to  promote  indigenous  manufacturing  of  electronic  goods,  including inter-alia Televisions,  Electronic  Components,  Set  Top  Boxes,  LED  Products,  Medical  Electronics,  Solar  PV  Cells  and Microwave Ovens.
10.  To promote indigenous manufacturing of Televisions, baggage rules have been amended to ban duty free import of Flat Panel Television Sets w.e.f. August 2014 under the baggage allowance.
11. Mandatory compliance to safety standards has been notified for identified Electronic Products with the objective to curb import of sub-standard and unsafe electronics goods. As of now, 30 electronic products are under the ambit of this Order. Skill Development
12.    Two  Schemes  for  skill  development  of  90,000  and  3,28,000  persons,  respectively    in  the  electronics  sector  has  been approved to provide human resource for the industry.
13.   The Scheme to enhance the number of PhDs in the Electronic System Design and Manufacturing (ESDM) and IT/IT Enabled Services (ITES) sectors has been approved. 3000 PhDs are proposed to be supported under the Scheme.

## Promotion of Innovation and R&D

14. Electronic  Development  Fund  (EDF)  policy  has  been  operationalized  to  support  Daughter  Funds  in  the  area  of Electronics System Design and Manufacturing, Nano-electronics and IT. The fund is housed in Canbank Venture Capital Fund Ltd. The supported Daughter Funds will promote innovation, R&D, product development and within the country.
15. Keeping in view the huge indigenous requirement on account of roadmap for digitalization of the broadcasting sector, Conditional Access System, entitled iCAS has been developed to promote indigenous manufacturing of Set Top Boxes (STBs). The iCAS is available to domestic STB manufacturers at a price of USD 0.5 per license for a period of three years as against market price of USD 4-5 per license for other competing products. The implementation of iCAS in the cable networks is underway.
16. An Electropreneur park has set up in New Delhi for providing incubation for development of ESDM sector which will contribute to IP creation and Product Development in the sector.
17. National Centre of Excellence in Large Area Flexible Electronics (NCFLEX) has been set up in IIT-Kanpur with the objectives to promote R&D and  Manufacturing Ecosystems; Entrepreneurship, International Partnerships and Human Resource development and develop prototypes in collaboration with industry for commercialization.
18. National Centre of Excellence for Technology on Internal Security (NCETIS) has been set up at IIT-Bombay with the objective to address the internal security needs of the nation on continuous basis by delivering technology prototypes required for internal security and to promote domestic industry in internal security.
19. Centre for Excellence on Internet of Things (IoT) has been set up in Bengaluru jointly with NASSCOM.
20. An Incubation center with focus on medical electronics has been set up at Indian Institute of Technology-Patna.
21. An Incubation Center at Kochi with focus on consumer electronics is being set up at IIITM, Kochi.
22. The Ministry of Electronics and Information Technology (MeitY) provides funding under several schemes for promotion of  R&D,  including  support  for  International  Patents  in  Electronics  &  IT  (SIP-EIT);  Multiplier  Grants  Scheme  and Scheme  for  Technology  Incubation  and  Development  of  Entrepreneurs  (TIDE)  in  the  area  of  Electronics,  ICT  and Management.
23. MeitY has approved a project to be implemented by Global Innovation and Technology Alliance (GITA) to promote Innovation, IP, R&D and commercialization of products, etc. in the ESDM sector by providing funding support to an Industry, for doing collaborative research with an Academic Institute in the priority areas with a timeline of not more than two years.
24. MeitY has approved a project being implemented by Biotechnology Industry Research Assistance Council (BIRAC) to promote scientific and technological research in Medical Electronics sector in India to address the pressing challenges associated with the development of innovative medical electronic devices and making them available, accessible and affordable to the people at the bottom of the pyramid.

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