Lok Sabha Question No. 1002 (UNSTARRED), answered on 2017-02-08
Subject: Electronic Manufacturing
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: ALOK SANJAR, CHANDRAKANT RAGHUNATH PATIL

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED  QUESTION NO. 1002

TO BE ANSWERED ON 08.02.2017

## ELECTRONIC MANUFACTURING

1002

## SHRI ALOK SANJAR:       SHRI C.R. PATIL:

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

- (a) the  details  of  domestic  demand  for  branded  electronic  items  and  the  items  being  manufactured indigenously;
- (b) whether the domestic production of branded electronic items is adequate to meet the demand;
- (c) if so, the details thereof and if not, the steps taken by the Government for augmenting manufacturing of electronic items domestically;
- (d) whether the Government is contemplating formulation of any policy for promotion of R&D in the field of electronics and information technology; and
- (e)      if so, the details thereof and the action taken in this regard so far?

## ANSWER

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

(a) and (b):  As per figures available from the Directorate General of Commercial Intelligence and Statistics (DGCIS), Ministry of Commerce and Industry for 2015-16, it is seen that India continues to be a net importer of electronic goods. The available data suggests that domestic production is not sufficient to meet the total demand. The relevant figures of total imports of electronics into India and total exports of electronics from India are given below:

| Import and Export of Electronics (Rs. Crore)   | Import and Export of Electronics (Rs. Crore)   | Import and Export of Electronics (Rs. Crore)   | Import and Export of Electronics (Rs. Crore)   |
|------------------------------------------------|------------------------------------------------|------------------------------------------------|------------------------------------------------|
| Commodity                                      | 2014-15                                        | 2015-16                                        | %Growth                                        |
| Imports                                        | 2,25,444                                       | 2,62,083                                       | 16.25                                          |
| Exports                                        | 36,723                                         | 37,300                                         | 1.57                                           |

The estimates of production of electronic goods as per figures provided by various Industry Associations are given below:

| Production of Electronics Sector (Rs. Crore)   | Production of Electronics Sector (Rs. Crore)   | Production of Electronics Sector (Rs. Crore)   | Production of Electronics Sector (Rs. Crore)   |
|------------------------------------------------|------------------------------------------------|------------------------------------------------|------------------------------------------------|
| S.No.                                          | Sub-sector                                     | 2014-15                                        | 2015-16                                        |
| 1                                              | Consumer Electronics                           | 55,806                                         | 55,765                                         |
| 2                                              | Industrial Electronics                         | 39,374                                         | 45,083                                         |
| 3                                              | Computer Hardware                              | 18,691                                         | 19,885                                         |
| 4                                              | Mobile phones                                  | 18,900                                         | 54,000                                         |
| 5                                              | Strategic Electronics                          | 15,700                                         | Not Available                                  |
| 6                                              | Electronic Components                          | 39,723                                         | 45,383                                         |
| 7                                              | Light Emitting Diodes (LED)                    | 2,172                                          | 5,092                                          |

- (c):  Steps taken by the Government for augmenting manufacturing of electronic items domestically are listed at Annexure .
- (d)  and  (e):  Ministry  of  Electronics  and  Information  Technology  (MeitY)  has  acknowledged  Research  & Development  (R&D)  and  promotion  of  innovation  as  an  integral  part  of  Electronics  &  Information,

Communication  Technology  (ICT)  ecosystem  and  it  has  been  supporting  the  entire  value  chain  of  R&D activities in the country ranging from the basic components to sophisticated product development. MeitY has taken various initiatives towards promotion of R&D in the different areas of Electronics &  ICT  including Communication,  Convergence  and   Broadband  Technologies,   Microelectronics,  VLSI   (Very  Large Scale

Integration),  Nanotechnologies,  Electronic  materials,  Industrial  electronics,  High  Performance  Computing, Networking,  Cyber  Security,  Medical  electronics,  Strategic  electronics,  RF/Microwave  and  Millimetre technologies,  free  and  open  source  software,  Language  Computing  and  development  of  technologies  for common man.

Initiatives taken by MeitY for the promotion of R&D in the field of Electronics and Information Technology are as under:

- (i) National Policy on Electronics (NPE) 2012 : One of the missions of NPE 2012 is to promote a vibrant and  sustainable  ecosystem  of  R&D,  design  and  engineering  and  innovation  to  enhance  manufacturing capabilities in electronics material, components, sub-assemblies as well as products.
- (ii) National  Policy  on  Information  Technology  (NPIT)  2012 :  NPIT  2012  focuses  on  applications  of technology-enabled  approaches  to  overcome  monumental  developmental  challenges  in  education,  health, skill development, financial inclusion, employment generation, governance etc. to greatly enhance efficiency across the board in the economy. The objectives of this policy inter alia include 'To promote innovation and R&D in cutting edge technologies and development of applications and solutions in areas like localization, location based services, mobile value added services, Cloud Computing, Social Media and Utility models.'
- (iii) ICT&E  (Information, Communication  Technology  and  Electronics)  R&D  and  Innovation Framework 2013 has been designed with a Vision 'To attain global  leadership  in the ICT&E sector  by building a vibrant  eco-system  to nurture, encourage, promote, facilitate and support research, innovation and product  development  for  rapid,  inclusive  and  sustainable  growth  of  the country.'
- (iv) MeitY is also implementing a Multiplier Grants Scheme (MGS). MGS aims to encourage collaborative R&D between industry and academics/ R&D institutions for development of products and packages.
- (v) In order to encourage filing of International Patents, a Scheme, 'Support International Patent Protection in  Electronics  &  IT  (SIP-EIT)'  for  SMEs  (Small  and  Medium  Enterprises)  and  Technology  Start-Up Companies is operational.

Annexure

## Steps taken by the Government for augmenting manufacturing of electronic items domestically

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
5. 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 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.

## Promotion of Innovation and R&D

14. Electronic Development Fund (EDF) policy has been approved 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  IITKanpur 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  IITBombay with the objective to address the internal security needs of the nation on continuous basis by
6. 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.
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,  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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