Lok Sabha Question No. 2426 (UNSTARRED), answered on 2016-11-30
Subject: Electronics Manufacturing
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: N.K. PREMACHANDRAN, Pratyusha Rajeshwari Singh, GANESH SINGH

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 2426

TO BE ANSWERED ON 30.11.2016

## ELECTRONIC MANUFACTURING

## 2426     SHRI  N.K.  PREMACHANDRAN: SHRIMATI  PRATYUSHA  RAJESHWARI SINGH: SHRI GANESH SINGH:

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

- (a) whether the Government proposes to promote electronics manufacturing sector to include it in Make in India  Programme  to  make  the  country  self  sufficient  in  electronic  manufacturing  and  generating employment;
- (b) if  so,  the action taken by the Government in this regard along with the employment generated in the sector during the last two years and the current year;
- (c) whether  Government  has  received  proposals  from  State  Governments  for  Electronic  Manufacturing Cluster (EMC) and Electronic System Design Manufacturing (ESDM) incubation centre and some of them particularly for ESDM from Odisha and EMC for Gwalior is pending with the Government;
- (d) if  so,  the  details  thereof  and the reasons therefore  along with the action taken by the Government to approve these proposals;
- (e) whether the electronic manufacturing industries are facing difficulties for its rapid growth; and
- (f)    if so, the action taken by the Government to remove the difficulties?

## ANSWER

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

(a)  and  (b).  Yes,  Sir.  The  Government  is  taking  initiatives  to  promote  electronics  manufacturing  in  the country. Electronics manufacturing is one of the 25 focus sectors of the Make in India programme, which seeks  to  transform  India  into  a  global  design  and  manufacturing  hub.  The  promotion  of  electronics manufacturing is one of the pillars of Digital India programme and the target to achieve 'Net Zero import' by 2020 is a manifestation of the intent. During past 14 months, approximately 40 new manufacturing units for  mobile  handsets  have  been  established   providing  1,20,000  (approximately)    direct  &  indirect employment  opportunities.    In  the  past  5-6  months,  about 15  new  manufacturing/  assembling  units  for components/  accessories  of  mobile  handsets  have  been  set  up  in  the  country  providing  employment  to approximately  20,000  persons.   Further,  approvals  have  been  accorded  to  75  applications  seeking incentives under  Modified  Special  Package  Scheme(M-SIPS)  of  Ministry envisaging  employment opportunities for 29328 persons. Under the  Electronics Manufacturing Cluster Scheme (EMC) Scheme,  13 EMCs  have  been  accorded  final  approval  which  is  expected  to  generate  1.78  Lakh  employment opportunities in coming years. Also, approval has been accorded for setting up of 04 Incubation Centers, which are expected to support around 180 start  ups in ESDM sector.

(c) and  (d): Under Electronics Manufacturing Cluster Scheme (EMC) Scheme,  24 applications for setting up    EMCs    have  been  received  from  State  Government  or  their  agencies.    This  includes  proposals  for setting  up  an  EMC  at  Infovally,  Bhubaneswar  Industrial  Area,  Odisha  and  one  at    Gwalior,  Madhya Pradesh. The proposal for setting up of Greenfield EMC at Infovally, Bhubaneswar Industrial Area, Odisha has  been  accorded  final  approval  on  05.09.2016  and  the  proposal  for  setting  up  of  Greenfield  EMC  at Gwalior,  Madhya Pradesh is under consideration for in-principle  approval.  A  proposal  for  setting  up  of ESDM Incubation Centre at Bhubaneswar, Odisha from STPI has been received with a total outlay of ` 22.44 crore including Grant-in-Aid from MeitY for ` 11.22 crore and  Government of Odisha contribution of ` 11.22  crore.      Software  Technology  Parks  of  India  (STPI)  has  been  requested    to  provide  certain clarifications on the said proposal.

(e)   and (f):       Holistic,  investor friendly  and market driven  initiatives are being taken towards creating conducive  environment  to  attract  global  and  domestic  companies  to  invest  in  electronics  manufacturing sector in the country. The steps taken by the Government to promote electronics hardware manufacturing in the country are enclosed as Annexure.

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## Steps taken by the Government to promote electronics manufacturing in the country

1. Promotion of electronics hardware manufacturing is one of the pillars of Digital India Initiative  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  such  as    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   ` 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  ` 50 Crore. For setting up of Brownfield Electronics Manufacturing Cluster, 75% of the cost of infrastructure, subject to a ceiling of ` 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 @ 2-3% 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 have  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.

## Annexure

## Promtion of Innovation and R&D

14. Electronic Development Fund (EDF) policy has been formulated 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, and product development  within the country.
15. Keeping  in  view  the  huge  indigenous  requirement  on  account  of  roadmap  for  digitalization  of  the broadcasting sector, Conditional Access System (titled 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 has already started.
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  IITKanpur with the objectives to promote R&D, Manufacturing, Entrepreneurships, International Partnerships and Human  Resources  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  IITBombay 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 TechnologyPatna.
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  (SIPEIT); 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 creation, R&D and commercialization of products, etc. in the ESDM sector by providing funding support to  industries for doing collaborative research with an academic institution  in the priority areas with a timeline of not more than two years. The funding is given on re-imbursement mode based on the expanses incurred in implementing the project.
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 electronics and making it available, accessible and affordable to the people at the bottom of the pyramid.
25. An Incubation Center at Hyderabad with focus on fabless chip design is being set up at IIT-Hyderabad.
26. The stakeholders of the Electronics System Design & Manufacturing (ESDM) sector have been engaged through  various      events  such  as  conferences,  seminars  and  workshop  to disseminate  the  government initiatives and to make the country self sufficient in electronic manufacturing.

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