What is the issue ?
The Ministry of Electronics and Information Technology (MEITY) on October 10, 2018 released the draft of the National Policy on Electronics 2018, aiming for a turnover of USD 400 billion in domestic electronics manufacturing industry by 2025.
Important points :
- The policy targets production of one billion mobile handsets by 2025, valued at USD 190 billion (about Rs 13 lakh crore)
- It is targeted to export 600 million mobile handsets valued at USD 110 billion (about Rs 7 lakh crore).
- 20 greenfield and three brownfield electronic manufacturing cluster projects have been sanctioned with the project outlay of Rs 3898 crore, including Rs 1577 crore from the Government of India.
- It promotes a forward looking and stable tax regime, including advance intimation to the industry to plan investments in the form of Phased Manufacturing Programme (PMP) in various segments of electronics, with a sunset clause should be promoted.
- It mentions that government would levy cess on identified electronic goods to be considered to generate resources for promotion of certain critical sub-sectors of electronics manufacturing such as semiconductor wafer fabrication and display fabrication units.
Objectives of Draft National Electronics Policy 2018
- The draft policy also aims to promote ease of doing business for the entire Electronic System Design and Manufacturing (ESDM) sector.
- It aims to encourage industry-led research and development and innovation in all sub-sectors of electronics.
- The policy aims to also push the startup ecosystem in emerging technology areas such as 5G, Internet of Things, artificial intelligence and machine learning, and their applications in areas such as defence, agriculture, health, smart cities and automation.
- It involves development of core competencies in all the sub-sectors of electronics, including electronic components and semiconductors, telecommunication equipment, medical electronics, defence electronics, automotive electronics, industrial electronics, strategic electronics, etc.
Proposals that have been made
- Promotion of manufacturing of electronic goods covered under the Information Technology Agreement (ITA-1) of the World Trade Organization
- Exempting the import duty on equipment not being manufactured in the country to reduce capital expenditure for setting up of a unit or for expansion of existing units
- Replacing the M-SIPS (Modified Special Incentive Package Scheme) with schemes that are easier to implement such as interest subsidy and credit default guarantee to encourage expansion in electronics manufacturing sector
Background to the issue :
- The first National Policy on Electronics (NPE) was rolled out in 2012.
- The NPE 2012 provided the road map for the development of Electronics System Design and Manufacturing (ESDM) sector in the country.
- Implementation of the Schemes/ Programmes under the aegis of NPE 2012 successfully consolidated the foundation for a competitive Indian ESDM value chain.
- The Government now seeks to build on that foundation to propel the growth of ESDM industry in the country.