Lok Sabha Question No. 3940 (UNSTARRED), answered on 2020-03-18
Subject: Promotion of Local Manufacturing of Electronic Equipments
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Annasaheb Shankar Jolle

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 3940

TO BE ANSWERED ON: 18.03.2020

## PROMOTION OF LOCAL MANUFACTURING OF  ELECTRONIC EQUIPMENTS

## 3940.     SHRI ANNASAHEB SHANKAR JOLLE:

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

- (a) the  steps  taken  by  the  Government  to  make  the  country  a  frontrunner  in  the  current  era  of  fourth industrial revolution; and
- (b) the steps taken by the Government to promote local manufacturing of quality electronic equipments and data security in the country?

## ANSWER

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

(a) & (b): The fourth industrial revolution brings together various technologies such as  Internet of Things (IoT),  cloud  computing,  big  data  analytics,  Artificial  Intelligence  (AI),  additive  manufacturing,  5G, Augmented Reality (AR), robotics, cyber security and Machine-to-Machine (M2M) communication.

The Ministry of Electronics and Information Technology has notified the National Policy on Electronics 2019 (NPE 2019) which envisions  positioning  India  as  a  global  hub  for  Electronics  System  Design  and Manufacturing (ESDM) by creating an enabling environment for the industry to compete globally.

The National Policy on Electronics (NPE 2019), inter-alia , aims to promote    path-breaking research, grass root level innovations, early stage Start-ups and skill development in emerging technology areas such as 5G, IoT,  Artificial  Intelligence,  Machine  Learning,  Drones,  Robotics,  Additive  Manufacturing,  Photonics, Nano-based devices, etc., and their applications in areas such as defence, agriculture, health, cyber security, smart cities and automation, with special focus on solving real-life problems.

As a result of the various steps taken by the Government of India for promotion of electronics hardware manufacturing and efforts of the industry, India's electronics production has increased from INR 1,90,366 crore in 2014-15 to INR 4,55,000 crore in 2018-19, at a CAGR of about 25% during the last four years.

As per Section 43A of the Information Technology Act 2000,a compensation is to be paid to the victim in case of unauthorized access of information and leakage of sensitive personal information. It mandates 'body corporates' to implement 'reasonable security practices' for protecting 'sensitive personal information' of individuals.  The  Information  Technology  (Reasonable  security  practices  and  procedures  and  sensitive personal data or information) Rules, 2011 notified under this section defines sensitive personal information and also mandate that body corporate must provide policy for privacy and disclosure of information, so that user  is  well  aware  of  the  type  of  personal  data  collected,  purpose  of  collection  and  usage  of  such information. The rules also specify mode of collection of information, disclosure of information, transfer of information, etc.

The  steps  taken  by  the  Government  to  promote  electronic  hardware  manufacturing  in  the  country  are annexed.

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## Annexure

## Steps taken by the Government topromote electronics hardware manufacturing in the country

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-inaid 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  topromote  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, interalia, 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  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.60/2018-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.
11. Public  Procurement  (Preference  to  Make  in  India)  Order :  To  encourage  'Make  in  India'  and  to  promote manufacturing and production of goods and services in India with a view to enhancing income and employment, the Government  has  issued  Public  Procurement  (Preference  to  Make  in  India)  Order  2017  vide  the  Department  for Promotion  of  Industry  and  Internal  Trade  (DPIIT)  Order  dated  15.06.2017  and  subsequent  revisions  vide  Order dated 28.05.2018 and 29.05.2019. In furtherance of the aforesaid Order, MeitY has notified 11 Electronic Products viz.,  Desktop  PCs,  Laptop  PCs,  Tablet  PCs,  Dot  Matrix  Printers,  Contact  and  Contactless  Smart  Cards,  LED Products, Biometric Access Control/ Authentication Devices, Biometric Finger Print Sensors, Biometric Iris Sensors and Servers vide Notification dated 14.09.2017 and Cellular Mobile Phones vide Notification dated 01.08.2018.
12. Compulsory  Registration  Order  (CRO) :  MeitY  has  notified  'Electronics  and  Information  Technology  Goods (Requirement  of  Compulsory  Registration)  Order,  2012'  for  mandatory  compliance  to  ensure  safety  of  Indian citizens by curbing import of substandard and unsafe electronic goods into India. 44 Product Categories have been notified under the CRO.
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