Lok Sabha Question No. 3995 (UNSTARRED), answered on 2020-03-18
Subject: Incentives to Electronic Manufacturing
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Mahua Moitra

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED  QUESTION NO.3995

TO BE ANSWERED ON 18.03.2020

## INCENTIVES TO  ELECTRONIC MANUFACTURING

## 3995.    SHRIMATI MAHUA MOITRA:

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

the steps taken/being taken by the Government to incentivize manufacturing and assembly of electronic components and to create an entire ecosystem of electronic manufacturing in the country for the future?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI SANJAY DHOTRE)

The steps taken by the Government to incentivize manufacturing and assembly of electronic components and to create an entire ecosystem of electronic manufacturing in the country for the future are at Annexure .

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The  steps  taken  by  the  Government  to  incentivize  manufacturing  and  assembly  of  electronic components and to create an entire ecosystem of electronic manufacturing in the country for the future

1.      National Policy on Electronics 2019 :  The National Policy on Electronics 2019 (NPE 2019) has been  notified  on  25.02.2019.  The  vision  of  NPE  2019  is  to  position  India  as  a  global  hub  for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the  country for  developing  core  components,  including  chipsets, and  creating an  enabling environment for the industry to compete globally.
2. 100%  FDI :  As  per  extant  Foreign  Direct  Investment  (FDI)  policy,  FDI  up-to  100%  under  the automatic route is permitted for electronics manufacturing, subject to applicable laws/ regulations; security and other conditions.
3. Modified Special Incentive Package Scheme (M-SIPS) :  The  scheme  was  notified  on  27 th July, 2012 to  provide  financial  incentives  to  offset  disability  and  attract  investments  in  the  electronics manufacturing sector.  It  has  been  amended  in  August,  2015  to  extend  the  period  of  the  scheme, enhance scope of the Scheme by including 15 more product verticals, and attract more investment. The  scheme  was  further  amended  in  January,  2017  to  expedite  the  investments.  The  scheme provides subsidy for capital expenditure - 20% for investments in Special Economic Zones (SEZs) and  25%  in  non-SEZs.  The  incentives  are  available  for  44  categories/  verticals  of  electronic products and components covering entire electronics manufacturing value chain. The scheme was open to receive applications till 31.12.2018 and is in the implementation mode.
4. Electronics  Manufacturing  Clusters  (EMC)  Scheme : Electronics Manufacturing Clusters Scheme  was  notified  on  22 nd October,  2012  to  provide  support  for  creation  of  world-class infrastructure  along  with  common  facilities  and  amenities  for  attracting  investment.  Under  the Scheme, 20 Greenfield EMCs and 3 Common Facility Centres (CFCs) measuring an area of 3,565 acres with total project cost of INR 3,898 crore including Government Grant-in-aid of INR 1,577 crore have been approved.
5. Electronics Development Fund (EDF) : Electronics Development Fund (EDF) has been set up as a 'Fund  of  Funds'  to  participate  in  professionally  managed  'Daughter  Funds'  which  in  turn  will provide  risk  capital  to  startups  and  companies  developing  new  technologies  in  the  area  of electronics and Information Technology (IT). This fund is expected to foster R&D and innovation in these technology sectors. INR 659 crore has been committed through EDF to 11 Daughter Funds with a targeted corpus of INR 5,500 crore.
6. Phased Manufacturing Programme (PMP) has been notified to promote domestic value addition in mobile handsets and their parts/ components manufacturing. As a result, India has rapidly started attracting investments into this sector and significant manufacturing capacities have been set up in the country. The manufacturing of mobile handsets and their parts/ components has been steadily moving  from  Semi  Knocked  Down  (SKD)  to  Completely  Knocked  Down  (SKD)  level,  thereby progressively increasing the domestic value addition.
7. Tariff  Structure has  been  rationalized  to  promote  domestic  manufacturing  of  electronic  goods, including, inter-alia, Cellular mobile handsets, Televisions, Electronic components, Set Top Boxes for TV, LED products and Medical electronics equipment.
8. Exemption from Basic Customs Duty on capital goods : Notified capital goods for manufacture of specified electronic goods are permitted for import at 'NIL' Basic Customs Duty.
9. Simplified import of used plant and machinery : The import of used plant and machinery having a  residual  life  of  at  least  5  years  for  use  by  the  electronics  manufacturing  industry  has  been simplified through the amendment of Hazardous and Other Wastes (Management and
10. Transboundary Movement) Rules, 2016, vide Ministry of Environment, Forest and Climate Change Notification dated 11.06.2018.
10. Relaxing  the  ageing  restriction :  The  Department  of  Revenue  vide  Notification  No.60/2018Customs  dated  11.09.2018  has  amended  the  Notification  No.158/95-Customs  dated  14.11.1995, relaxing the ageing restriction from 3 years to 7 years for specified electronic goods manufactured in India and re-imported into India for repairs or reconditioning.

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