---
title: "National Policy on Electronics 2019"
date: 2019-04-24
author: "Kulin Dave"
url: https://ksandk.com/regulatory/national-policy-on-electronics-2019/
---

# National Policy on Electronics 2019

Posted On - 24 April, 2019 • By - Kulin Dave

### Introduction

The National Policy on Electronics 2019 (“Policy”) was notified  

by the Ministry of Electronics and Information Technology (“MeitY”) on  

25.02.2019. The Policy, which recognises the electronics industry as the  

“world’s largest and fastest growing industry”, seeks to “position India as a  

global hub for Electronics System Design and Manufacturing (“ESDM”) by  

developing core components and creating an enabling environment for the  

industry to compete globally”.

### Mission

1. Promotion  

of domestic manufacturing and reduction of imports.
2. Integration  

of India’s electronics hardware manufacturing sector with global value chains.
3. Development  

of capacities for manufacturing in all sub sectors of electronics.
4. Incentivising  

startups focused on emerging technology.
5. Promotion  

of ease of manufacturing through fiscal incentives.
6. Protection  

of domestic ESDM industry from dumping of electronics goods.
7. Promotion  

of research and development.
8. Facilitation  

of the setting up of global manufacturing bases for components and  

sub-assemblies in India.

### Objectives

1. Turnover  

of USD 400 billion has been set as a target for the ESDM industry for 2025.  

This is to include the production of 1 billion mobile handsets by 2025, valued  

at USD 190 billion of which 600 million handsets worth USD 110 billion are  

earmarked for export.
2. Ease  

of doing business must be improved for the ESDM industry.
3. Research,  

development and innovation in electronics are to be encouraged.
4. A  

comprehensive ecosystem must be created for start-ups working on emerging  

technologies, including 5G, internet of things, machine learning, drones,  

robotics, additive manufacturing, phonotics and nano-based devices to encourage  

them to develop “real-life” applications of such technologies in agriculture,  

defence, health, cyber security amongst others.
5. Availability  

of skilled manpower in the ESDM sector must be incentivised.
6. Fiscal  

incentives and support must be provided to encourage export-led growth,  

including enhancing economies of scale in electronics manufacturing.
7. Core  

competencies must be developed in all sub sectors of electronics, including  

electronic components, telecommunication and broadcasting equipment, medical electronics  

amongst many others.
8. India  

must become a global leader in the Electronics Manufacturing Services (“EMS”)  

segment by progressive value addition in manufacturing of electronic products.
9. Policy  

support and incentives must be provided for capital intensive projects.
10. Indigenisation  

in microchips used by strategic and critical infrastructure sectors such as  

defence, space and atomic energy must be encouraging.
11. Specialised  

governance structures for the ESDM sector are to be created.
12. Loans  

for setting up or expanding electronics manufacturing units must be  

facilitated.
13. Research,  

innovation and support to the industry in areas of packaging, interconnects and  

micro photonics must be promoted to counter the problems posed by the continued  

use of silicon in equipment.
14. Transfer  

of technologies must be incentivised for core technologies.
15. Research,  

innovation and support in green processes, including e-Waste management,  

citizen engagement programmes and e-Waste recycling must be promoted.

### Strategy

The strategy section provides the blue print of the  

initiatives and interventions which the MeitY will take in collaboration with  

concerned ministries/departments to achieve the goals mentioned under the  

‘objectives’ section. States may also play an important role in implementing  

these strategies, as they have been encouraged to play a proactive role in  

electronics manufacturing, and have been directed to create institutional  

mechanisms to implement the schemes/programmes under the Policy.

As per the Policy, MeitY shall facilitate initiatives on the  

measures listed below:

#### a. Ecosystem for a globally competitive ESDM sector:

This includes providing tax benefits, exploring defence  

offsets to promote component manufacturing, and modifying or replacing the  

Electronics Manufacturing Clusters (“EMC”) scheme to attract investments in the  

complete value chain of the identified verticals. The Policy further suggests  

exemptions from import duty on identified capital equipment to promote domestic  

manufacturing. The Policy gives an impetus to ‘high performance computing’  

capabilities and advocates supplying electronic units/systems for national  

critical infrastructure from domestic industry.

#### b. Developing and mandating standards:

The Policy advocates the creation of a framework for  

developing standards based on global benchmarks for the electronics industry  

and mandating compliance through the MeitY. It also stresses on creating  

domestic electronics’ testing capacities.

#### c. Ease of doing business:

The Policy suggests strengthening and leveraging Invest India  

and the National Investment Promotion and Facilitation Agency to facilitate  

investment in India and coordinate with government agencies on behalf of  

investors till they become functional.

#### d. Industry led R&D and innovation:

The Policy recommends the creation of a Sovereign Patent Fund  

(“SPF”) to promote intellectual properties in the ESDM sector and make such  

patents available to the industry. The Policy provides an impetus to emerging technology  

such as 5G, artificial intelligence, internet of things, virtual reality, as  

well as strategic electronics, defence and medical electronics. Research and  

development is also encouraged through “Chairs” for research in premier  

institutes, incubation centres, academia and freelancer-led innovation.

#### e. Human resource development:

This focuses on skilled manpower development for emerging  

technologies and strategic electronics. The Policy also talks about a skilled  

manpower/research base at the Post Graduate/Ph.D. level to work in emerging  

technologies. The Policy also talks about sending Post Graduate/Ph.D. scholars  

on foreign deputation for a period of 2 years to carry out research, subject to  

serving in India for the next 5 years.

#### f. Export promotion:

The Policy envisages a package of promotions to develop exports  

in electronics goods.

#### g. Trusted electronics value chain:

The Policy advocates the creation of trusted electronics value  

chain initiatives to improve cyber security, contribute to national defence and  

critical national infrastructure.

#### h. Cyber security:

The Policy calls for the development of adequate testing  

facilities and the promotion of secure chips to reduce cyber security risks.  

The Policy seeks to engage the start-up ecosystem to develop cyber security  

products.

#### i. Promotion of Electronics Components Manufacturing  

Ecosystem:

The Policy calls for incentives to support the manufacturing  

of core electronic components, lithium-ion cells, optical fibre,  

assembly-testing-marking-packaging (“ATMP”) of semi-conductors amongst other  

products.

#### j. Mega projects:

This calls for incentives for mega projects entailing high  

investment and investment in mega facilities abroad.

#### k. Preferential market access:

The Policy calls for leveraging the Government e-Market Place  

(“ATMP”) and the Public Procurement (Preference to Make in India) Order  

2017[62] to create a market for electronic and cyber security products.

#### l. Developing Core competencies in all sub-sectors:

The Policy argues for special support for developing core  

competencies in the following strategic sub-sectors:

1. Fabless  

chip design industry,
2. Medical  

electronics devices industry,
3. Automotive  

electronics industry and power electronics for mobility,
4. Strategic  

electronics industry (such as defence, atomic energy, space, railways,  

telecommunications etc.).

#### m. Electronics Manufacturing Services (EMS):

The Policy advocates the promotion of certain activities to  

create the requisite component manufacturing eco-system in India such as,  

engineering and design and assembly of Printed Circuit Boards (“PCBs”),functional  

testing and maintenance services for PCBs.

#### n. Promotion of ATMP:

ATMP is to be promoted for certain semiconductor ICs,  

including memory chips, on security grounds.

#### o. Others:

Certain other measures have been encouraged, such as warehousing facilities for components and raw materials, mining or acquiring mines of rare earth metals in foreign countries required for electronic manufacturing. The Policy also proposes to develop an index for indicating status and growth of the electronics manufacturing industry in various states

### Contributed by – Kulin Dave

#### [King Stubb & Kasiva](https://ksandk.com/),  
Advocates & Attorneys

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---

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