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Draft electronics policy: Govt aims $400-billion electronics manufacturing sector by 2025

While the draft policy released on Wednesday sets targets for manufacturing of electronic products, it did not detail and aim for job creation in the sector.

By: ENS Economic Bureau | New Delhi |
October 11, 2018 1:14:53 am
Business news, manufacturing sector, electronics sector, electronics manufacturing industry, Ministry of Electronics, Indian express The Ministry of Electronics and IT seeks comments from stakeholders.

With an aim to create a $400-billion electronics manufacturing industry by 2025, the Ministry of Electronics and Information Technology has come out with a draft electronics policy, on which it has sought comments from stakeholders. The draft policy proposes to double the mobile phone production from 500 million to 1 billion by 2025.

“This ($400 billion turnover) 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,” the draft said. According to the draft, the government plans to end modified special incentive scheme with schemes that it will find easier to implement such as interest subsidy and credit default guarantee etc. Modified Special Incentive Package scheme (M-SIPS) was launched in 2012 which 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, the draft said.

The Indian Express reported in May that the government was working on a framework to increase the competitiveness of made in India electronics products that will include efforts to improve the ease of doing business for electronic manufacturers and address supply chain ecosystem concerns of production in India.

While the draft policy released on Wednesday sets targets for manufacturing of electronic products, it did not detail and aim for job creation in the sector. However, one of the 14 objectives of the policy is to provide support for “significantly” enhancing availability of skilled manpower in the electronics system design and manufacturing industry.

The current national policy on electronics in place had proposed creation of 200 electronic manufacturing clusters (EMCs) by 2020 that will house entire ecosystem for development and production of specific category of products. According to the draft of the new policy, 20 greenfield EMCs and three brownfield EMC projects have been sanctioned with the project outlay of Rs 3,898 crore, including Rs. 1,577 crore from the Government of India.

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. The draft also proposes suitable direct tax benefits, including inter-alia investment-linked deduction under Income Tax Act for electronics manufacturing sector, for setting up of a new manufacturing unit or expansion of an existing unit.

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