Lok Sabha Question No. 122 (STARRED), answered on 2021-02-10
Subject: Employment Generation in Electronics and IT Industry
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Bharti Pravin Pawar

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA STARRED   QUESTION NO. *122

TO BE ANSWERED ON 10.02.2021

## EMPLOYMENT GENERATION IN ELECTRONICS AND IT INDUSTRY

## *122.    DR. BHARATI PRAVIN PAWAR:

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

- (a) the  details  of  the  total  employment  generated  in  the  Electronics  and  Information Technology industry in the country;
- (b) whether  it  is  true  that  India  has  become  a  promising  centre  in  recent  years  for manufacturing mobiles;
- (c) if so, the details of the number of mobile factories set up in the country during each of the last three years and the current year, State-wise;
- (d) whether  the  Government  is  taking  any  measures  to  encourage  setting  up  of  more mobile manufacturing factories in the country; and
- (e) if so, the response received by the Government in this regard?

## ANSWER

MINISTER OF ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

(a) to (e):   A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO.*122 FOR 10.02.2021 REGARDING EMPLOYMENT GENERATION IN ELECTRONICS AND IT INDUSTRY

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- (a):    As per the National Association of Software and Services Companies (NASSCOM), the Information Technology (IT) industry employs over 43 lakhpersons in the country. As per the Confederation of Indian Industry (CII), employment in Electronics hardware manufacturing industry in the country is estimated to be about 30 lakh persons.
- (b) and (c): As a result of various initiatives of Governmentincluding Phased Manufacturing Programme (PMP), India has become a promising centre for mobile  phonesand  their  subassemblies/ partsmanufacturing in recent years. The production of mobile phones has gone up significantly from around 6 crore units valued at INR 19,000 crore in 2014-15 to around 33 crore units valued at INR 2,14,000 crore in 2019-20.

As per  Industry  estimates,  over  200  units  are  manufacturing  mobile  phones  and  their  subassemblies / partsin the country, up from only 2 units manufacturing mobile phones in 2014. Most  of  the  major  brands  (both  foreign  and  Indian)  either  have  already  set  up  their  own manufacturing facilities or are in the process of doing so or have sub-contracted manufacturing to Electronics Manufacturing Services (EMS) companies operating from the country.

The details of the number of factories producing mobile phones and their sub-assemblies / parts/  components  in  the  countryapproved  under  the  Modified  Special  Incentive  Package Scheme (M-SIPS) of Ministry of Electronics and Information Technology (MeitY), year-wise and State-wise are at Annexure-1.

- (d):    Promotion  of  electronics  hardware  manufacturing,  including  manufacturing  of  mobile phonesand their sub-assemblies / parts is one of the important pillars of both 'Make in India' and  'Digital  India'  programmes  of  the  Government  of  India.  The  measures  taken  by  the Government  to  promote  electronics  hardware  manufacturing,includingsetting  up  of  mobile phone  manufacturing  factories  in  the  country  are  listed  at Annexure-2. The  key  measures inter-alia include:
- (i) 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.  One  of  the  objectives  of  NPE  2019  is  promotion  of domestic  manufacturing  and  export  in  the  entire  value-chain  of  mobile  phone manufacturing.
- (ii) To  attract  and  incentivize  large  investments  in  the  electronics  value  chain  and promote  exports, Production Linked Incentive Scheme  (PLI)  for Large Scale Electronics Manufacturing has been notified on 01.04.2020 under the aegis of NPE 2019.  The  Scheme  provides  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.
- (e):        The  PLI  Scheme  was  announced  in  April  2020  and  the  last  date  for  receipt  of applications  was  31.07.2020.The  scheme  has  been  a  huge  success  in  terms  of  the  interest received from applicant companies and projected outcomes. The PLI Scheme is designed to attract  global  champion  companies  into  India  and  promote  Indian  champion  companies  in electronic manufacturing. Over the next five years, the scheme is expected to lead to a total production  of  about  INR  10.5  lakh  crore.  The  scheme  is  expected  to  boost  exports significantly  and  of  the  total  estimated  production,  more  than  60%  is  expected  to  be contributed  by  exports.The  scheme  is  also  expected  to  bring  in  additional  investment  in electronics manufacturing to the tune of INR 11,000 crore. Value addition by the approved companies is expected to go up from 20-25% presently to 35-40% by 2025.

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## Annexure-1

## Factories producing mobile phonesand their sub-assemblies / parts / components in the country approved under theModified Special Incentive Package Scheme (M-SIPS)

| State / Year     | 2014   | 2015   | 2016   | 2017   | 2018   | 2019   | 2020   |   Total |
|------------------|--------|--------|--------|--------|--------|--------|--------|---------|
| Uttar Pradesh    | 1      | 5      | 5      | 1      | 2      | 3      | 1      |      18 |
| Maharashtra      | 2      | 3      | 4      | 1      | 1      | -      | 2      |      13 |
| Haryana          | -      | 2      | 6      | 1      | 1      | -      | -      |      10 |
| Tamil Nadu       | -      | 2      | 2      | 2      | 1      | 1      | -      |       8 |
| Karnataka        | -      | 2      | 2      | -      | 2      | 1      | -      |       7 |
| Andhra Pradesh   | -      | 1      | 3      | -      | -      | -      | 1      |       5 |
| Gujarat          | -      | 1      | 3      | -      | -      | -      | -      |       4 |
| Rajasthan        | -      | 1      | -      | -      | 1      | -      | -      |       2 |
| Telangana        | -      | -      | 1      | -      | -      | -      | 1      |       2 |
| Daman            | -      | -      | 1      | -      | -      | -      | -      |       1 |
| Himachal Pradesh | -      | -      | 1      | -      | -      | -      | -      |       1 |
| Total            | 3      | 17     | 28     | 5      | 8      | 5      | 5      |      71 |

## Annexure-2

Measures taken by the Government to promote electronics hardware manufacturing, including setting up of mobile phone manufacturing factories 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.

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 provide 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  provides  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 Scheme, 19 Greenfield EMCs and 3 Common Facility Centres (CFCs)  measuring  an  area  of  3,464  acres  with  total  project  cost  of  INR  3,743  crore including Government Grant-in-Aid of INR 1,527 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 409 crore has been committed through EDF to 9 Daughter Funds with a targeted corpus of INR 2,626 crore.

6. Phased  Manufacturing  Programme  (PMP) has  been  notified  topromote  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.
7. 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.
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.158/95Customs 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  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 locals suppliers.
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
8. of substandard and unsafe electronic goods into India. 63 Product Categories have been notified under the CRO and the order is applicable on 44 product categories.
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 cost effective electronic components  based on organic devices to address requirements through joint technology developments, to realize indigenous technologies for manufacturing.
16. Centre  on  Excellence  (CoE)  on  Medical  Electronics  and  Bio-Physics has  been approved to be set up at Andhra Pradesh MedTech Zone (AMTZ), Visakhapatnam with a    mandate  of  carrying  out  various  R&D  activities,  strengthening  innovations,  IP creation,  prototype  modelling  for  Medical  device  manufacturers,  including  ElectroBiomaterial technology product manufacturers, etc.
17. 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  will  be  implemented  by  Society  for  Innovation  and Development  (SID),  being  converted  to  a  Section  8  company  titled  'Foundation  for Science, Innovation and Development' under the auspices of Indian Institute of Science (IISc) at Centre for Nano Science and Engineering (CeNSE), Bengaluru.

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