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Cabinet Decision: Govt approves new national electronics policy, eyes $400 billion turnover by 2025

As per the policy, the government will end modified special incentive scheme (M-SIPS) with schemes that it will find easier to implement such as interest subsidy and credit default guarantee, among others.

By: ENS Economic Bureau | New Delhi |
February 20, 2019 4:38:16 am
national electronics policy, Union Cabinet of india, National Policy on Electronics, indian express Arun Jaitley

With an aim to promote domestic manufacturing and export in electronic system design and manufacturing (ESDM) to achieve a turnover of $400 billion by 2025, the Union Cabinet on Tuesday cleared the National Policy on Electronics 2019, as per which the turnover amount shall include targeted production of 1 billion mobile handsets by 2025 valued at $190 billion, including 600 million mobile handsets valued at $110 billion for export.

As per the policy, the government will end modified special incentive scheme (M-SIPS) with schemes that it will find easier to implement such as interest subsidy and credit default guarantee, among others. The policy calls for providing special package of incentives for mega projects which are “extremely high-tech” and entail huge investments, such as semiconductor facilities display fabrication, etc. and formulation of suitable schemes and incentive mechanisms to encourage new units and expansion of existing units. To boost the entire value chain of electronics, the policy proposes to push development of core competencies in all the sub-sectors of electronics including electronic components and semiconductors, defence electronics, automotive electronics, industrial electronics, strategic electronics etc. Further, to promote development and acquisition of intellectual property in the ESDM sector, the policy envisages creation of a sovereign patent fund.

“We want to achieve 32 per cent growth in electronic production and add about 1 crore jobs through development of electronic manufacturing in the country,” said Ravi Shankar Prasad, Minister of Electronics and Information Technology, while addressing reporters about the Cabinet’s decision. Prasad said that as of 2017-18 electronics production growth was at 26.7 per cent.

The policy cleared by the Cabinet succeeds the 2012 electronics policy in which M-SIPS was envisaged. The scheme provided for capital subsidy of 25 per cent for Electronics Industry located in non-SEZ area and 20 per cent for those in SEZ areas. As on September 30, 2018, 265 applications with proposed investment of Rs 61,925 crore have been received under M-SIPS, out of which 188 applications with proposed investment of Rs 40,922 crore have been approved and the investment of Rs 8,335 crore has been made by 139 applicants.

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“The NPE (National Policy on Electronics) 2019 when implemented will lead to formulation of several schemes, initiatives, projects, etc., in consultation with the concerned ministries /departments, for the development of ESDM sector in the country. It will enable flow of investment and technology, leading to higher value addition in the domestically manufactured electronic products, increased electronics hardware manufacturing in the country and their export, while generating substantial employment opportunities,” the government said in a statement, underscoring the impact of the policy.

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