Lok Sabha Question No. 5615 (UNSTARRED), answered on 2022-04-06
Subject: Export of Electronic Goods
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Malook Nagar

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA

## UNSTARRED QUESTION NO. 5615

TO BE ANSWERED ON: 06.04.2022

## EXPORT OF ELECTRONIC GOODS

## 5615. SHRI MALOOK NAGAR:

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

- (a) the details of manufacturing and export of electronic goods in the country during the last five years;
- (b) the  details  of  the  initiatives  taken  by  the  Government  to  promote  manufacturing  of electronic goods in the country; and
- (c) the details of the number of electronic companies set up in the country under 'Make in India' programme?

## ANSWER

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

(a):  Government of India's goal is to make India a significant design and manufacturing hub for electronics as part of its AtmaNirbhar Bharat economic policies. In this regard, we are broadening and deepening our electronic manufacturing ecosystem. Over the last five years, theproduction and export of electronic goods is as under:

|                  | 2016-17   | 2017-18   | 2018-19   | 2019-20   | 2020-21   |
|------------------|-----------|-----------|-----------|-----------|-----------|
| Electronic Goods |           |           |           |           |           |
| **Production     | 3,17,331  | 3,88,306  | 4,58,006  | 5,33,550  | 5,54,461  |
| *Export          | 39,980    | 41,220    | 61,908    | 82,936    | 81,948    |

- (b):  The  steps  taken  by  Government  to  make  India  a  significant  design  and  manufacturing hub by broadening and deepening electronic manufacturing eco system are annexed.
- (c):  Government  has  notified  schemes  in  order  to  boost  electronics  manufacturing  in  the country and incentivize large investments in the electronics value chain. The details of the schemes and number of beneficiary companies are as under:
- (i) Production  Linked  Incentive  Scheme  (PLI)  for  Large  Scale  Electronics Manufacturing :  The  scheme  was  notified  on  1st  April,  2020.  PLI  Scheme extends an incentive of 6% to 4% to eligible companies on incremental sales (over base year) of goods under target segments (mobile phones and specified electronic components)  that  are  manufactured  in  India,  for  a  period  of  five  (5)  years subsequent to the base year (FY 2019-20). As of date, 32 companies have been approved under the PLI Scheme for Large Scale Electronics Manufacturing.
- (ii) Production  Linked  Incentive  Scheme  (PLI)  for  IT  Hardware: The    scheme was notified on 3rd March, 2021. The PLI Scheme extends an incentive of 4% to

2% / 1% to eligible companies on net incremental sales (over base year i.e., FY 2019-20)  of  goods  under  target  segments  that  are  manufactured  in  India,  for  a period  of  four  years  (FY  2021-22  to  FY  2024-25).  The  target  IT  hardware segments  under  the  Scheme  include  Laptops,  Tablets,  All-in-One  Personal Computers (PCs) and Servers. Incentives are applicable under the Scheme from 01.04.2021. As of now, 14 companies have been approved under the PLI Scheme for IT Hardware.

- (iii) Scheme  for  Promotion  of  Manufacturing  of  Electronic  Components  and Semiconductors  (SPECS): Thescheme    was  notified  on  1st  April  01,  2020.  It provides 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.  As  of  now,  23  applications  have  been  approved  by  the  executive committee.
- (iv) Modified  Special  Incentive  Package  Scheme  (MSIPS)The  scheme  was announced in July 2012 and subsequently been amended in August, 2015 and in January, 2017. It provides subsidy of 20-25% on capital expenditure. It has been closed  on  31 st December,  2018  to  receive  new  applications.  As  of  now,  313 applications have been approved under the scheme.

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## Steps  taken  by  the  Government  to  promote  the  electronics  hardware  manufacturing sector in the country

1. National Policy on Electronics 2019 :  The National Policy on Electronics 2019 (NPE 2019)  has  been  notified  by  Ministry  of  Electronics  and  Information  Technology (MeitY). 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 Schemes have been notified:

- (i) Production  Linked  Incentive  Scheme  (PLI)for  Large  Scale  Electronics Manufacturing notified  vide  Gazette  Notification  No.CG-DL-E-01042020218990  dated  April  01,  2020  provides  an  incentive  of  4%  to  6%  to  eligible companies on net incremental sales (over base year) involved in mobile phone manufacturing and manufacturing of specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units, for a period of five (5) years.
- (ii) Production Linked Incentive Scheme (PLI) for IT Hardware notified  vide Gazette  Notification  No.CG-DL-E-03032021-225613  dated  March  03,  2021 provides  an  incentive  of  4%  to  2%  /  1%  on  net  incremental  sales  (over  base year) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four (4) years. The Target Segments under PLI  Scheme  include  (i)  Laptops  (ii)  Tablets  (iii)  All-in-One  PCs  and  (iv) Servers.
- (iii) Scheme  for  Promotion  of  Manufacturing  of  Electronic  Components  and Semiconductors  (SPECS) notified  vide  Gazette  Notification  No.CG-DL-E01042020-218992 dated April 01, 2020 provides 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 subassemblies and capital goods for manufacture of aforesaid goods.
- (iv) Modified  Electronics  Manufacturing  Clusters  (EMC  2.0)  Scheme notified vide Gazette Notification No.CG-DL-E-01042020-218991 dated April 01, 2020 provides 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.
- (v) Semiconductor  and  Display  Manufacturing  Schemes: The  Union  Cabinet chaired by Hon'ble Prime Minister Shri Narendra Modi approved the comprehensive program with an outlay of INR 76,000 crore (> USD 10 billion) on 15.12.2021 for the development of robust and sustainable Semiconductor and Display ecosystem  in the  country  whereby  the  following  schemes  were introduced:
-  Semiconductor & Display Fabs scheme extends fiscal support for setting up  Semiconductor  &  display  Fab  which  is  aimed  at  attracting  large investments for setting up semiconductor wafer fabrication facilities and

display panels in the country, and thus helping in the establishment of a trusted value chain.

-  Compound  Semiconductors  /  Silicon  Photonics  /  Sensors  Fab  and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT Facilities  Scheme extends  fiscal  support  of  30%  of  the  Capital Expenditure investment for setting up of the said facilities.
-  Design  Linked  Incentive  Scheme offers  financial  incentives,  design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design.
-  Approval was granted for the setting up of India Semiconductor Mission (ISM) as an Independent Business Division within Digital India Corporation having administrative and financial autonomy to drive India's strategies for  developing  semiconductors and display  manufacturing ecosystem. Envisioned to be led by global experts in the Semiconductor and Display industry, the ISM will serve as the nodal agency for efficient, coherent  and  smooth  implementation  of  the  schemes  centred  around Semiconductors and Display ecosystem, in consultation with the Government ministries/departments/agencies, industry, and academia.
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 (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 3,732 crore including Government Grant-in-Aid of INR 1,529 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. EDF is expected to invest in 8 Daughter Funds. The total targeted corpus of these 8 Daughter Funds was Rs. 2,176  crore  and  the  amount  committed  by  EDF  to  these  8  Daughter  Funds  was  Rs. 271.30 crore.
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.158/95Customs 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.
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 has come into effect for all  the notified 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), IISc Bengaluru.

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