Lok Sabha Question No. 1189 (UNSTARRED), answered on 2016-11-23
Subject: Electronic Manufacturing Units
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: PRABHATSINH PRATAPSINH CHAUHAN, DARSHANA VIKRAM JARDOSH, MOHANBHAI KALYANJIBHAI KUNDARIYA

## GOVERNMENT OF INDIA

## MINISTRY OF ELECTRONICS AND  INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 1189

TO BE ANSWERED ON: 23.11.2016

## ELECTRONIC MANUFACTURING UNITS

## 1189. SHRI P.P.  CHAUHAN:

## SHRIMATI DARSHANA  VIKRAM  JARDOSH: SHRI KUNDARIYA  MOHAN BHAI KALYANJI  BHAI:

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

- (a) whether  in  view  of  the  huge  domestic  demand  for  electronic  industries  and  to  activate  self  sufficiency  in electronics manufacturing, the Government is considering to set up electronic manufacturing units particularly mobile chip production/ fabrication units in the country;
- (b) if so, the details thereof and the locations selected for the purpose, State-wise; and
- (c) if  not,  the  action  taken  by  the  Government  to  curtail  the  electronic  import  and  fulfill  the  demand domestically?

## ANSWER

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

(a), (b) and (c): Ministry of Electronics and Information Technology had issued Letters of Intent dated 19.03.2014 to two business consortia, one led by M/s. Jaiprakash Associates Limited (with IBM, USA and Tower Semiconductor Limited,  Israel  as  partners  and  proposed  location  in  the  State  of  Uttar  Pradesh)  and  the  other  led  by  M/s.  HSMC Technologies India Pvt. Ltd. (with ST Microelectronics and Silterra Malaysia Sdn. Bhd. as partners and proposed location in the State of Gujarat) for setting up of Semiconductor Wafer Fabrication (FAB) manufacturing facilities.

While the consortium led by M/s. Jaiprakash Associates Ltd. has withdrawn from the project, the consortium led by M/s. HSMC Technologies India Pvt. Ltd. has been putting in efforts to attract equity and debt funding for setting up the Semiconductor FAB project. Also, Government has taken several other steps to encourage domestic electronics manufacturing industry in order to curtail the import and fulfil the domestic demand, as per list enclosed at 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  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

Annexure

- 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 @ 2-3% 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 interalia 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 has already started.
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.
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. 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 electronics and making it available, accessible and affordable to the people at the bottom of the pyramid.

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