Lok Sabha Question No. 45 (UNSTARRED), answered on 2018-07-18
Subject: Incentives to Boost Electronic Exports
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: KONAKALLA NARAYANA RAO

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED  QUESTION NO. 45

TO BE ANSWERED ON 18.07.2018

## INCENTIVES TO BOOST ELECTRONIC EXPORTS

## 45. SHRI  KONAKALLA  NARAYANA  RAO:

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

- (a) whether the Government is proposing to announce special packages to boost the electronics export and remove the hindrances in electronics export as a part of facilitating the ease of doing business programme;
- (b) if so, the details thereof; and
- (c) the details of the incentives being given to the electronic industry and included in the National Electronics Policy?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI S.S. AHLUWALIA)

(a) to (c): Promotion of electronics hardware manufacturing is one of the pillars of 'Digital India' programme of the Government. Several initiatives have been taken by  the  Government  for  promotion  of  indigenous  manufacturing  and  export  of electronic goods, which are as follows:

- (i) 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. The scheme is open to receive applications till 31.12.2018. Under the scheme, so far, 172 projects with proposed investment of Rs.37,317 crore have been approved.
- (ii) The  Electronics  Manufacturing  Clusters  (EMC)  Scheme  was  notified  to provide  financial  support  for  creation  of  state-of-art  infrastructure  for electronics  manufacturing  units.  The  scheme  was  open  for  receipt  of application  for  a  period  of  5  years,  i.e.,  upto  21 st October,  2017.  Further period of 5  years is  available  for  disbursement  of  funds  for  the  approved applicant. Under the scheme, 20 Greenfield EMCs and 3 Common Facility Centres  (CFCs)  covering  a  land  area  of  3,565  acres  have  been  accorded

final approval for development of infrastructure and common facilities at a cost  of  Rs.3,896  crore,  including  Government  Grant-in-aid  of  Rs.1,577 crore. An area of 3,565 acres across 15 states is being developed in these EMCs for setting up of Electronics industry across the country.

- (iii) 10  electronic  products  have  been  notified  by  MeitY  on  14.09.2017,  in furtherance of the Department of Industrial Policy and Promotion's Public Procurement (Preference to Make in India) Order 2017.
- (iv) As  per  extant  Foreign  Direct  Investment  (FDI)  policy,  FDI  upto  100% under the automatic route is permitted for electronic product manufacturing,  subject  to  applicable  laws/  regulations;  security  and  other conditionalities.
- (v) 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.  Zero  duty  EPCG scheme  allows  import  of  capital  goods  at  zero  customs  duty,  subject  to specified export obligation.
- (vi) 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.  To promote domestic value addition in manufacturing of mobile handsets, a Phased Manufacturing Programme (PMP) has been notified.
- (vii) Electronics  Development  Fund  (EDF)  is  set  up  as  a  'Fund  of  Funds'  to participate in professionally managed 'Daughter Funds' which in turn will provide risk capital to companies developing new technologies in the area of  electronics,  nano-electronics  and  Information  Technology  (IT).  This fund is expected to foster R&D and innovation in these technology sectors. Twenty  two  Daughter  Funds  have  been  selected  for  investment  through EDF. The cumulative commitment of EDF to these 22 Daughter Funds is Rs.1,227 crore and the total targeted corpus of these 22 Daughter Funds is around Rs.10,900 crore. MeitY has released Rs.51.24 crore to EDF, which in turn has released Rs.46.55 crore to six Daughter Funds. As on 30 th June 2018, these six Daughter Funds have invested Rs.169 crore in 45 Startups/ Ventures.
- (viii) Keeping in view the huge indigenous requirement on account of roadmap for  digitalization  of  the  broadcasting  sector,  Indian  Conditional  Access System (iCAS) has been developed in Public-Private Partnership mode 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 3-5 per license

for  other  competing  products.  The  implementation  of  iCAS  in  the  cable networks is underway.

- (ix) 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 Transboundary  Movement)  Rules,  2016,  vide  Ministry  of  Environment, Forest and Climate Change Notification dated 11.06.2018.

******