Lok Sabha Question No. 3643 (UNSTARRED), answered on 2019-01-02
Subject: Electronic Industry in Defence
Ministry: DEFENCE
Asked by: N.K. PREMACHANDRAN

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA

## UNSTARRED QUESTION NO.3643

TO BE ANSWERED ON THE 2 ND  JANUARY, 2019

## ELECTRONIC INDUSTRY IN DEFENCE

3643.  SHRI  N.K. PREMACHANDRAN:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) whether  the  Government  proposes  to  use  the  development  of  electronic  industry  in defence sector considering  its large scope in aerospace and defence and if so, the details of the initiatives;
- (b) whether the Government proposes to modernize its A&D capital equipment base and if so, the details thereof;
- (c) whether the domestic electronic industry is sufficient for meeting the demand of defence and if so, the details thereof;
- (d) if  not,  the  action  taken  by  the  Government  for  development  of  domestic  electronic industry and modification of weapons; and
- (e) whether  the  Government  proposes  private  participation  for  development  of  electronic industry in defence sector and if so, the details thereof?

## A    N    S    W    E    R

MINISTER OF STATE

IN THE MINISTRY OF DEFENCE

र  ा रा य मं ी

(DR. SUBHASH BHAMRE)

(डा. सुभाष भामरे)

(a) to (d): The Government proposes to promote indigenous product development  and  manufacturing  in  the  entire  value  chain  of  the  Defence Electronic  sector  and  to  develop  capacities  for  manufacturing  of  strategic electronic within the country with increasing value addition. It proposes to use it to  leverage  India's  strength  in  IT  /  software  area  to  support  Aerospace  and defence driven Ecosystem. The steps taken by the Government for promotion of domestic electronic industry is given in Annexure.

(e) As a part of Government efforts to develop specialized zones dedicated to defence production including electronic industry in defence sector, the Government  has  announced  setting  up  of  two  defence  corridors,  one  in  Uttar Pradesh and other in Tamil Nadu. Detailed project report on defence corridors is under preparation.

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## ANNEXURE REFERRED IN THE REPLY GIVEN IN PARTS (a) to (e) OF LOK SABHA UNSTARRED QUESTION NO. 3643 FOR ANSWER ON 2.1.2019

Following are the  steps  taken  by  Government  for  promotion  of  domestic electronics manufacturing:

1. Modified Special Incentive Package (MSIPS) provides financial incentives  to  offset  disability  and  attracts  investments  in  the  Electronic Systems Design and Manufacturing sector.  The scheme is available  for both new  projects and expansion project, and is open to receive applications till 31.12.2018.
2. Electronics Manufacturing Clusters (EMC) Scheme to provide financial support for creation of state-ofthe art infrastructure for electronics manufacturing units.
3. Tariff Structure has been rationalized to promote domestic manufacturing  of  electronic  goods,  including  inter-alia  mobile  handsets, Televisions etc.
4. 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.
5. For  promotion  of  exports  in  the  sector,  Merchandise  Exports  from India  Scheme  (MEIS)  and  Export  promotion  capital  goods  (EPCC)    are available under Foreign trade policy, 2015-20.
6. The imports of used plant and machinery having a residual life of at least  5  years  or  use  by  the  electronics  manufacturing  industry  has  been simplified  through  the  amendment of  Hazardous and other  wastes Rules, 2016.
7. Notified capital goods for manufacture of specified electronic goods are permitted for import at 'Nil' Basic customs duty.
8. The  Department  of  Revenue  vide  Notification  No.60/2018-Customs 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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## Steps taken to promote innovation and R&D:

1. 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 companies developing new technologies
2. in the area of electronics, Nano-electronics and Information Technology. 2. Ministry of Electronics and Information Technology (MeitY) provides grant-in- aids support to institutes of higher learning like IITs, IISc, Central Universities and R&D Organizations to conduct research in identified thrust areas. 3. An Electropreneur park  has been set  up in New  Delhi for providing incubation  for  development  Electronic  System  Design  &  Manufacturing (ESDM)  sector which will contribute IP creation and Product Development in the sector. 4. National  Centre  of  Excellence  for  Technology  on  Internal  Security (NCETIS) has been set up at IIT-Mumbai 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. 5. Centre of  Excellence on Internet of  Things (IoT) has been set up in Bengalure jointly with NASSCOM. 6. An incubation centre with focus on medical electronics has been set up at IIT- Patna.
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