Lok Sabha Question No. 1330 (UNSTARRED), answered on 2022-02-09
Subject: Electronic Manufacturing
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Sanjay(Kaka) Ramchandra Patil, Pocha Brahmananda Reddy

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 1330

TO BE ANSWERED ON 09.02.2022

## ELECTRONIC MANUFACTURING

## 1330.   SHRI SANJAY KAKA PATIL: SHRI POCHA BRAHMANANDA REDDY:

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

- (a) whether  the  government  is  on  the  track  to  achieve  the  target  of  local  electronic manufacturing of $250-$300 billion by 2026;
- (b) if so, the details and year-wise projections thereof; and
- (c) if  not,  the  details  of  the  challenges  being  faced  by  the  Government  in  achieving  the target?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAJEEV CHANDRASEKHAR)

(a)  and  (b):  Yes,  Sir.    Government  is  on  track  to  achieve  the  target  of  domestic  electronic manufacturing of $300 Billion by 2026.  The goal of Government of India is to make India a significant  design  and  manufacturing  hub  in  global  value  chains  for  Electronics  as  part  of  its AtmaNirbhar Bharat economic policies and to further capitalize on the growing demand by the world's consuming economies for trusted value chain. Ministry of Electronics and Information Technology (MeitY) working together with industry (Indian Cellular and Electronics Association) has finalised  and  released a vision document aiming for $300 billion sustainable electronics  manufacturing  by  2026.    The  strategy  to  reach  the  $300  billion  production  of electronics  from  current  level  of  about  $75  billion  is  built  on  broadening  and  deepening electronics manufacturing in India. This is proposed to be achieved by building competitiveness and  scale  by  attracting  global  electronics  manufacturers/brands,  shifting,  and  developing  subassemblies and component ecosystem, building a design ecosystem, nurturing Indian champions, and steadily removing cost disabilities faced by the industry. Flagship schemes like Production Linked  Incentive  (PLI)  Schemes,  Schemes  for  Promotion  of  Electronics  Components  and Semiconductors (SPECS), Electronics Manufacturing Clusters (EMC 2.0) Schemeand Programme for development of semiconductor and display manufacturing ecosystem in India are expected to propel electronics manufacturing in India. The steps taken by the Government for the expansion of electronic manufacturing in the country are at Annexure .

The year wise projections for achieving the target of domestic electronics manufacturing of$300 billion by FY 2025-26 is as under:

| Year                |   2020-21 |   2021-22 |   2022-23 |   2023-24 |   2024-25 |   2025-26 |
|---------------------|-----------|-----------|-----------|-----------|-----------|-----------|
| Value (USD Billion) |      74.7 |        82 |       110 |       155 |       220 |       300 |

Source: Indian Cellular and Electronics Association (ICEA)

********

## Annexure

Steps taken by the Government for the expansion of electronics 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  (except  from  countries  sharing  land  border  with  India), subject to applicable laws / regulations; security and other conditions.
3. Electronics  Manufacturing  Clusters  (EMC)  Scheme: Electronics  Manufacturing  Clusters  Scheme  was notified  on  22nd  October,  2012  to  provide  support  for  creation  of  world-class  infrastructure  along  with common facilities and amenities for attracting investment. Under the Scheme, 19 Greenfield EMCs and 3 Common Facility Centres (CFCs) measuring an area of 3,464 acres with total project cost of INR 3,762 crore including Government Grant-in-Aid of INR 1,538 crore have been approved.
4. 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.
5. Phased Manufacturing Programme (PMP) has been notified to promote domestic value addition in mobile phones  and  their  sub-assemblies  /  parts  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 phones has been steadily moving from Semi Knocked Down (SKD) to Completely Knocked Down (CKD) level, thereby progressively increasing the domestic value addition.
6. Tariff Structure has been rationalized to promote domestic manufacturing of electronic goods, including, inter-alia, Cellular mobile phones, Televisions, Electronic components, Set Top Boxes for TV, LED products and Medical electronics equipment.
7. 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.
8. 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.
9. 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
10. restriction from 3 years to 7 years for specified electronic goods manufactured in India and re-imported into India for repairs or reconditioning.
10. Public Procurement (Preference to Make in India) Order 2017: 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 Orders dated 28.05.2018, 29.05.2019, 04.06.2020 and 16.09.2020. In furtherance of  the  aforesaid  Order,  MeitY  has  notified  mechanism  for  calculating  local  content  for  13  Electronic Products viz., (i) Desktop PCs, (ii) Thin Clients, (iii) Computer Monitors, (iv) Laptop PCs, (v) Tablet PCs, (vi)  Dot  Matrix  Printers,  (vii)  Contact  and  Contactless  Smart  Cards,  (viii)  LED  Products,  (ix)  Biometric Access Control /  Authentication  Devices,  (x)  Biometric  Finger  Print  Sensors,  (xi)  Biometric  Iris  Sensors, (xii) Servers, and (xiii) Cellular Mobile Phones, for procurement to be made from local suppliers.
11. 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.  63  Product Categories have been notified under the CRO and the order is applicable on 63 product categories.
12. Establishment of Gallium Nitride (GaN) Ecosystem Enabling Centre and Incubator: The  project  for 'Establishment  of  Gallium  Nitride  (GaN)  Ecosystem  Enabling  Centre  and  Incubator  for  High  Power  and High Frequency Electronics' has been approved. The project is being implemented by Society for Innovation and Development (SID), Centre for Nano Science and Engineering (CeNSE), IIScBengalur.

*******