Lok Sabha Question No. 337 (UNSTARRED), answered on 2021-02-03
Subject: Global Hub for ESDM
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Balashowry Vallabbhaneni

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED  QUESTION NO. 337

TO BE ANSWERED ON 03.02.2021

## GLOBAL HUB FOR ESDM

## 337.   SHRI BALASHOWRY VALLABHANENI:

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

- (a) whether the Government has taken any steps under the National Policy on Electronics 2019  to position India as a global hub for Electronics System Design and Manufacturing;
- (b) if so, the details thereof;
- (c) whether any institutions under this policy have been proposed by the Government for the State of Andhra Pradesh; and
- (d) if so, the details thereof?

## ANSWER

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

(a)  and  (b):  The  Government  has  notified  the  National  Policy  on  Electronics  2019  (NPE 2019) on 25.02.2019, with the vision to position India as a global hub for Electronics System Design and Manufacturing (ESDM) and create an enabling environment for the industry to compete globally. The steps taken by the Government to position India as a global hub for ESDM are annexed.

(c) and (d):  A Centre of Excellence (CoE) for Medical Electronics and Bio-Physics has been approved to  be  set  up  at  Andhra  Pradesh  MedTech  Zone  (AMTZ),  Visakhapatnam,  in  the State  of  Andhra  Pradesh  with  a  total  outlay  of  Rs.32.02  crore, out  of  which  Grant-in-Aid (GIA) from Ministry of Electronics and Information Technology (MeitY) is Rs.18.67 crore for a period of three years.

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Steps taken by the Government to position India as a global hub for Electronics System Design and Manufacturing (ESDM)

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.

To  attract  and  incentivize  large  investments  in  the  electronics  value  chain  and  promote exports, following three Schemes have been notified under the aegis of NPE 2019:

- i. Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing  notified  vide  Gazette  Notification  No.CG-DL-E-01042020-218990 dated April 01, 2020 shall extend an incentive of 4% to 6% to eligible companies on incremental  sales  (over  base  year)  involved  in  mobile  phone  manufacturing  and manufacturing  of  specified  electronic  components,  including  Assembly,  Testing, Marking and Packaging (ATMP) units.
- ii. Scheme  for Promotion of Manufacturing of Electronic  Components  and Semiconductors (SPECS) notified vide Gazette Notification No.CG-DL-E01042020-218992 dated April 01, 2020 shall provide financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products, i.e., electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods.
- iii. Modified  Electronics  Manufacturing  Clusters  (EMC  2.0)  Scheme notified  vide Gazette  Notification  No.CG-DL-E-01042020-218991  dated  April  01,  2020  shall provide  support  for  creation  of  world  class  infrastructure  along  with  common facilities and amenities, including Ready Built Factory (RBF) sheds / Plug and Play facilities for attracting major global electronics manufacturers along with their supply chain to set up units in the country. The Scheme shall provide financial assistance for setting  up  of  both  EMC  projects  and  Common  Facility  Centres  (CFCs)  across  the country.
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.      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 was 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  EMC  Scheme,  nineteen  (19)  Greenfield  Electronics  Manufacturing Clusters  (EMCs)  and  three  (3)  Common  Facility  Centres  (CFCs)  have  been  approved  in fifteen  (15)  states  across  the  country.  These  EMCs  are  being  developed  over  an  area  of 3,464 acres with a project outlay of INR 3,743 crore including Government grant-in-aid of INR 1,527 crore.
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.  EDF  is  expected  to invest in 9 Daughter Funds. The total targeted corpus of these 9 Daughter Funds is Rs. 2,626 crore and the amount committed by EDF to these 9 Daughter Funds is Rs. 409 crore.
6. Phased Manufacturing Programme (PMP) has been notified to promote domestic value addition  in  mobile  handsets  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 handsets has been steadily moving from Semi Knocked Down (SKD) to Completely Knocked Down (CKD) 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 : The Government of India has issued Public Procurement (Preference to Make in India) Order 2017 [PPP-MII Order 2017] to  encourage  'Make  in  India'  and  promote  manufacturing  and  production  of  goods and services in India with a view to enhancing income and employment.  In furtherance of the  aforesaid  Order,  Ministry  of  Electronics  and  Information  Technology  (MeitY)  vide Notification No. W-43/4/2019-IPHW-MeitY dated 07.09.2020 has notified the 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.
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. 63 Product Categories have been notified under the CRO. The details are available at the website of MeitY (http://meity.gov.in/esdm/standards). 13.  National  Centre  of  Excellence  in  Large  Area  Flexible  Electronics  (NCFLEX) has been set up in IIT-Kanpur 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 IIT-Bombay 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 Products 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  costeffective electronic components based on organic devices to address requirements through joint technology developments, to realize indigenous technologies for manufacturing.

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