Lok Sabha Question No. 6252 (UNSTARRED), answered on 2017-04-12
Subject: Manufacturing of Electronic Products
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: ELUMALAI VELLAIGOUNDER

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 6252

TO BE ANSWERED ON 12.04.2017

## MANUFACTURING  OF ELECTRONIC PRODUCTS

## 6252.      SHRI V. ELUMALAI:

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

- (a) whether the Government is considering a proposal to boost manufacturing of electronic products in the country;
- (b) if so, the details thereof;
- (c) whether the Government is considering a 10 year tax holiday for the same; and
- (d) if so, the details thereof?

## ANSWER

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

(a) and  (b):  Government has taken several initiatives  to boost manufacturing of electronic products in the country, as detailed at Annexure .

(c)  and  (d):    Presently,  there  is  no  proposal  under  consideration  of  the  Government  for providing  a  10  year  tax  holiday  under  the  Income-tax  Act  for  manufacturing  of  electronic products.

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## Initiatives taken by the Government to boost manufacturing of electronic products in the country

- 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.
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 Mobile Handsets,  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 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;  Manufacturing;  Ecosystems;  Entrepreneurship;  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 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.

## Annexure

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.
22. A  fabless  chip  design  incubator  centre  is  being  set  up  at  IIT  Hyderabad  to  incubate  start-ups  in  semiconductor  design.  This Incubator will incubate 50 start-ups over a period of 5 years.
23. 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.
24.  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.
25.  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.

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