Lok Sabha Question No. 529 (UNSTARRED), answered on 2016-04-27
Subject: Electronic and Telecom Manufacturing
Ministry: COMMUNICATIONS AND INFORMATION TECHNOLOGY
Asked by: BANSHILAL MAHTO, JANARDAN SINGH SIGRIWAL

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY (DEPARTMENT OF ELECTRONICS &INFORMATION TECHNOLOGY)

## LOK SABHA

## UNSTARRED QUESTION NO.  529

TO BE ANSWERED ON: 27.04.2016

## ELECTRONIC AND TELECOM MANUFACTURING

## 529     DR. BANSHILAL MAHATO:  SHRI JANARDAN  SINGH  SIGRIWAL:

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

- (a) whether  the  Government  proposes  to  make  the  country  self-sufficient  in  the    matter    of      electronic    and      telecommunications manufacturing under  the Make in India initiative and if so, the details thereof:
- (b)          the  details  of  import/export  of  electronic/telecommunication    equipments    made  during  the  last  three  years  and    the  current  year, country-wise:
- (c)     whether large scale import of electronic and telecommunication equipments is  being made from China and if so, the details  thereof and the reasons therefor;
- (d)    the details of the Research and  Development (R&D) undertaken in electronic industry to augment production and supply of quality goods at par with developed countries; and
- (e)    whether the Government proposes any  policy initiatives to review the Electronics    System Design and Manufacturing sector in  the country and if so, the details thereof and   the time by which such review is likely to be  completed?

## ANSWER

## MINISTER FOR COMMUNICATIONS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a):        Government  is  taking  initiatives  to  promote  electronic  and  telecommunications  manufacturing  in  the  country.  Electronics  and telecommunications manufacturing is one of the 25 focus sectors of the Make in India programme, which seeks to transform India into a global design and manufacturing hub. The promotion of electronics manufacturing is one of the pillars of Digital India programme. The target to  achieve  'Net  Zero import' by 2020 is a manifestation of the intent. In this regard, various initiatives have been taken that are holistic, investor friendly and market driven towards creating conducive environment to attract global and domestic companies to invest in electronics manufacturing  sector  in  the  country.  The  details  of  the  initiatives  taken  in  this  regard  are  at  Annexure.  Prior  to  May  2014,  investment proposals worth Rs.12,000 crores (approx.) were received in the Department of Electronics and Information Technology (DeitY)  under the Modified  Special  Incentive  Package  Scheme  (M-SIPS).  Since  May  2014  till  March  2016,  investment  proposals  worth  Rs.1,05,000  crores (approx.)  have  been  received  in  DeitY  under  M-SIPS.  Major  investors  are  Bosch,    Continental,  GE,  Sterlite,  NIDEC,  Mundra  Solar,  LG, Haier, Flextronics, SFO Technologies, Lava, Micromax, Karbonn, BHEL, BEL, Jabil, Amphenol Interconnect India Pvt. Ltd., Tata Power, Harman, Shogini, Magneti Merelli, Calsonic Kansei, Vihaan Networks, Hero Moto Corp, Salcomp, Syscom, Perto, etc. Investment proposals are mostly in the verticals of Display Fab, Solar, Telecom, Automotive Electronics, Electronic Components and Consumer Electronics. (b) and (c):   As per Directorate General of Commercial Intelligence and Statistics (DGCI&S), Kolkata, the total import, import from China and  export  of  electronic  and  telecommunication  items  (which  include  computer  hardware,  peripherals;  consumer  electronics;  electronic components; electronics and telecom instruments; accumulators, batteries and  electrodes) during the last three years and the current year is as

follows:

(USD Billion)

|   S.No. | Year                     |   Total Import |   Import from China |   Export |
|---------|--------------------------|----------------|---------------------|----------|
|       1 | 2012-13                  |           33.5 |                16.5 |      8.2 |
|       2 | 2013-14                  |           33.2 |                17   |      7.8 |
|       3 | 2014-15                  |           37.5 |                19   |      6.2 |
|       4 | 2015-16 (Upto Feb. 2016) |           37.2 |                20   |      5.3 |

The list of country-wise import and export is available at  http://deity.gov.in/sites/upload\_files/dit/files/exim-electronics-529.xlsx. The large scale  import  of  electronic  (including  telecommunication)  items  is  taking  place  from  China,  as  China  has  substantial  share  in  global manufacturing of electronics.

- (d):      The  Government is taking initiatives to promote research & development in electronics and the  steps being taken in this regard are mentioned at S.Nos. 13 to 23 of Annexure.
- (e):    The Government has been reviewing the policies pertaining to Electronics System Design and Manufacturing (ESDM) sector in the country from time to time, as detailed below:
- (i)    Under the 'Digital India' Programme and the 'Make in India' Programme, the Modified Special Incentive Package Scheme (M-SIPS) has  attained  renewed  vigour.  Giving  a  big  boost  to  electronics  manufacturing  in  the  country,  in  July  2015,  the  Government  approved  the extension and expansion of the M-SIPS. The scope of the scheme has been expanded to cover 15 new product categories, which were not covered  earlier  and  some  of  the  simplifications  introduced  are  -  allowing  M-SIPS  incentives  from  the  date  of  submission  of  application; disbursement of incentives on a quarterly basis as against annual basis  under the  earlier  scheme  and  allowing  M-SIPS in  any  part  of  the country as against only in notified areas. The scheme has also been extended for a period of 5 years beyond July 26, 2015. The notification in this regard was issued on 03.08.2015.
- (ii)   The policy for providing preference to domestically manufactured electronic goods in procurement due to security considerations and in Government procurement was earlier notified vide DeitY Gazette Notification dated 10.02.2012. Several representations were received from organizations,  industry  and  trade  bodies  and  some  countries  expressing  concerns  regarding  the  policy  provisions  relating  to  electronic products having security implications and its application to the private sector. A review of the Policy was undertaken and the policy revised. The revised policy for providing preference to Domestically Manufactured Electronic Products in Government procurement has been notified by DeitY on 23.12.2013. The revised policy is applicable to all Ministries/ Departments (except Ministry of Defence) and their agencies for electronic  products  purchased  for  Governmental  purposes  and  not  with  a  view  to  commercial  resale  or  with  a  view  to  use  in  goods  for commercial sale.

Annexure

## Initiatives being taken by the Government to promote electronic and telecommunication manufacturing in the country

1. Promotion of electronics hardware manufacturing is one of the pillars of Digital India campaign of the Government.
2.  The National Policy on Electronics (NPE 2012) was notified in October 2012 with the vision to create a globally competitive electronics design and manufacturing industry to meet the country's needs and serve the international market.
3.  Modified  Special  Incentive  Package  Scheme  (M-SIPS)  provides  financial  incentives  to  offset  disability  and  attract  investments  in  the Electronics Systems Design and Manufacturing (ESDM) sector. The scheme was notified in July 2012. The scheme provides subsidy for investments in capital expenditure - 20% for investments in SEZs and 25% in non-SEZs. The scheme is available for both new projects and expansion projects. For high technology and high capital investment units like Fabs, production subsidy @10% is also provided. The incentives are available for investments  made in a project  within a period of 10  years. The scheme is open to receive applications till 26.07.2020.
4.  Electronics  Manufacturing  Clusters  (EMC)  Scheme  provides  financial  assistance  for  creating  world-class  infrastructure  for  electronics manufacturing units. The assistance for the projects for setting up of Greenfield Electronics Manufacturing Clusters is 50% of the project cost subject to a ceiling of Rs. 50 Crore for 100 acres of land. For larger areas, pro-rata ceiling applies. For lower extent, the extent of support  would  be  decided  by  the  Steering  Committee  for  Clusters  (SCC)  subject  to  the  ceiling  of  Rs.  50  Crore.  For  setting  up  of Brownfield Electronics Manufacturing Cluster, 75% of the cost of infrastructure, subject to a ceiling of Rs.50 Crore is provided.
5. Policy for providing preference to domestically manufactured electronic products in Government procurement is under implementation.
6. A meeting of State IT Ministers and State Government Officials was held on 26.08.2014 to encourage them to actively promote electronics manufacturing. Several States have shown keen interest.
7. Approvals for all foreign direct investment up-to 100% in the electronic hardware manufacturing sector are under the automatic route.
8. Under the Electronics Hardware Technology Park (EHTP) Scheme, approved units are allowed duty free import of goods required by them for carrying on export activities, CST reimbursement and excise duty exemption on procurement of indigenously available goods, as per the Foreign Trade Policy.
9. Tariff Structure has been rationalized to promote indigenous manufacturing of electronic goods.
10. Mandatory compliance to safety standards has been notified for identified Electronic Products with the objective to curb import of substandard and unsafe electronics goods. As of now, 30 electronic products are under the ambit of this Order.
11. Two Schemes for skill development of 90,000 and 3,28,000 persons, respectively  in the electronics sector has been approved to provide human resource for the industry.
12. The Scheme to enhance the number of PhDs in the Electronic System Design and Manufacturing (ESDM) and IT/IT Enabled Services (ITES) sectors has been approved. 3000 PhDs are proposed to be supported under the Scheme.
13. Electronic Development Fund (EDF) policy has been operationalized to support Daughter Funds in the area of Electronics System Design and Manufacturing, Nano-electronics and IT. The fund is housed in Canbank Venture Capital Fund Ltd. and letters of commitment have already been given to four daughter funds. The supported Daughter Funds will promote innovation, R&D, product development and within the country.
14. Keeping in view the huge indigenous requirement on account of roadmap for digitalization of the broadcasting sector, Conditional Access System,  entitled  iCAS  has  been  developed  to  promote  indigenous  manufacturing  of  Set  Top  Boxes  (STBs).  The  iCAS  is  available  to domestic STB manufacturers at a price of USD 0.5 per license for a period of three years as against market price of USD 4-5 per license for other competing products. The implementation of iCAS in the cable networks has already started.
15. An Electropreneur park has been approved for providing incubation for development of ESDM sector which will contribute  IP creation and Product Development in the sector.
16. National Centre of Excellence in Large Area Flexible Electronics (NCFLEX) is being set up in IIT Kanpur with the objectives to promote R&D;  Manufacturing;  Ecosystems;  Entrepreneurship;  International  Partnerships  and  Human  Resources  and  develop  prototypes  in collaboration with industry for commercialization.
17. National Centre of Excellence for Technology on Internal Security (NCETIS) is being 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.
18. Centre for Excellence on Internet of Things (IoT) is being set up in Bengaluru jointly with NASSCOM.
19. An Incubation center with focus on medical electronics is being set up at Indian Institute of Technology - Patna.
20. The  Department  of  Electronics  and  Information  Technology  (DeitY)  provides  funding  under  several  schemes  for  promotion  of  R&D, including  support  for  International  Patents  in  Electronics  &  IT  (SIP-EIT);  Multiplier  Grants  Scheme  and  Scheme  for  Technology Incubation and Development of Entrepreneurs (TIDE) in the area of Electronics, ICT and Management.
21. An Incubation center at Kochi with focus on consumer electronics is being set up at IIITKM.
22.  DeitY has approved a project to be implemented by Global Innovation and Technology Alliance (GITA) to promote Innovation, IP, R&D and commercialization of products, etc. in the ESDM sector by providing funding support to an Industry, for doing collaborative research with an Academic Institute in the priority areas with a timeline of not more than two years.
23. DeitY has approved a project being implemented by Biotechnology Industry Research Assistance Council (BIRAC) to promote scientific and technological research in Medical Electronics sector in India to address the pressing challenges associated with the development of innovative medical electronics and making it available, accessible and affordable to the people at the bottom of the pyramid.

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