Lok Sabha Question No. 3077 (UNSTARRED), answered on 2018-03-14
Subject: Foreign Investment in ESDM Sector
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: A.T. (NANA) PATIL

Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be pleased to state:

- (a) the special plans to increase foreign investment in ESDM sector;
- (b) the investment made in Jalgaon area of Maharashtra under ESDM over the past years and the employment opportunities generated thereof;
- (c) the number of the youth trained so far under the ESDM skill development programme in Jalgaon, Maharashtra and the number of youth who got employment; and
- (d) the  targets  set  regarding  training,  employment  generation  and  investment  in  Jalgaon  in future?

## ANSWER

## MINISTER OF STATE FOR  ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI K. J. ALPHONS)

(a):  The  following  steps  have  been  taken/  planned  to  increase  foreign  investment  in  the Electronics System Design and Manufacturing (ESDM) sector:

- i. In addition to the Investment Facilitation Cell, Help Desks for Japan, Israel and Taiwan to assist  foreign  investors  are  functional  in  the  Ministry  of  Electronics  and  Information Technology  (MeitY)  to  handhold  and  help  investors  during  their  various  stages  of transition;  to  expedite  and  facilitate  the  investment  proposals  from  companies  and  to facilitate interactions with State Governments as well as other agencies of Government of India.
- ii. Foreign  Direct  Investment  (FDI)  upto  100%  under  the  automatic  route  is  permitted  for manufacturing of electronic goods.
- iii. High potential companies within sectoral spread of ESDM are identified and approached through promotional letters.
- iv. Organising various workshops/ roundtables/ road-shows and one-to-one meetings to attract investment in ESDM sector, and participation in the national and international events.
- v. Modified  Special  Incentive  Package  Scheme  (M-SIPS):  To  offset  disability  and  attract investments from domestic and foreign companies in Electronics manufacturing, M-SIPS was launched by the Government in July 2012. The scheme has been suitably amended time  to  time.  The  scheme  mainly  provides  20-25%  subsidy  for  investments  in  capital expenditure for setting up of an electronic manufacturing facility (20% for SEZ Units and 25%  for  non-SEZ  Units).  The  incentives  are  available  for  44  categories  of  electronic products and product components.

Further,  as  per  the  Directorate  of  Industries,  Government  of  Maharashtra,  to  promote  ESDM sector in Maharashtra, the State Government announced a policy in April-2016.  This policy has been formulated to reduce imports substantially, promote foreign investment, generate substantial  employment  and  increase  the  share  of  electronics  sector  in  country's  GDP.    The investment  target  over  5  year  period  is  3  billion  USD  with  a  turnover  of  12  billion  USD, generate  1  lakh  employment  and  facilitate  import  substitution  of  2  billion  USD.    Enhanced incentives are proposed to be given to ESDM units.  The incentives are in the form of industrial promotion  subsidy  linked  to  GST,  interest  subsidy,  power  tariff  subsidy,  electricity  duty exemption, stamp duty exemption; incentives for quality certification, technology up-gradation, patent  registration,  clean  technology,  credit  rating.    Similarly  incentives  are  admissible  for setting up Electronics Manufacturing Cluster. A Venture Fund is also proposed under the policy. Apart  from  this,  incentives  for  property  tax,  R&D,  market  development,  human  resource development are also admissible.

(b):  As per the Directorate of Industries, Government of Maharashtra, in Jalgaon District, 77 Electronics Hardware units are registered with an estimated investment of Rs.22.33 crore and employment for 906 persons.

(c):  As per the Directorate of Industries, Government of Maharashtra, in Jalgaon, 60 youth have been trained so far under ESDM skill development programme and about 10 youth have been employed.

(d):  As per the Directorate of Industries, Government of Maharashtra, the ESDM policy of the State  Government  is  for  the  entire  State.  The  targets  in  the  policy  are  for  the  entire  State  of Maharashtra and there are no specific targets for individual districts.

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