Lok Sabha Question No. 2103 (UNSTARRED), answered on 2020-03-04
Subject: Domestic Production of Consumer Electronics
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Poonam (Mahajan) Vajendla Rao

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 2103

TO BE ANSWERED ON: 04.03.2020

## DOMESTIC PRODUCTION OF CONSUMER ELECTRONICS

## 2103       SHRIMATI POONAM MAHAJAN:

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

- (a) whether domestic production of consumer electronics is insufficient to meet its increasing demand within the country;
- (b) if so, the details thereof and the reasons therefor; and
- (c) the  steps  taken/proposed  to  be  taken  by  the  Government  to  improve  the  domestic  production  of consumer electronics?

## ANSWER

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

(a),  (b)  and  (c):  The  domestic  production  of  electronic  items,  including  consumer  electronics,  at  this point  of  time  is  not  sufficient  to  meet  its  increasing  demand  within  the  country  due  to  several disabilities  which  render  domestic  production  of  electronic  items  uncompetitive.  These, inter-alia , include high cost of finance; logistics;   and lack of electronic components eco-system.

The  Government  has  taken  several  steps  to  improve  the  domestic  production  of  electronic  items, including consumer electronics as listed at Annexure . As a result, the domestic production of electronic items has increased substantially from Rs.1,90,366 crore in 2014-15 to Rs.4,58,006 crore in 2018-19. The  production  of  consumer  electronic  items  has  increased  from  Rs.55,806  crore  in  2014-15  to Rs.77,000 crore in 2018-19.

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Annexure

The  steps  taken  by  the  Government  to  improve  the  domestic  production  of  electronic  items,  including consumer electronics

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  27.07.2012  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
4. 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 Cluster Scheme has been notified  on  22.10.2012  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 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.
13. National Centre of Excellence in Large Area Flexible Electronics (NCFLEX) has  been  set  up  in  IITKanpur  with  the  objectives  to  promote  R&D;  Manufacturing;  Ecosystem;  Entrepreneurship;  International Partnerships and Human Resources and develop prototypes in collaboration with industry for commercialization.
14. 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 delivering technology prototypes required for internal security and to promote domestic industry in internal security.
15. National  Centre  of  Excellence  for  Next  Generation  AMOLED  Displays,  OLED  Lighting  and  OPV 2193Products has  been  set  up  at  IIT-Madras  with  a  mandate  to  collaborate  with  stakeholders  to  develop next-generation,  state-of-the-art,  high-volume  and  cost  effective  electronic  components  based  on  organic devices to address requirements through joint technology developments, to realize indigenous technologies for manufacturing.

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