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”.
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:
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.
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.
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.
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.
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.
The Policy envisages a package of promotions to develop exports in electronics goods.
The Policy advocates the creation of trusted electronics value chain initiatives to improve cyber security, contribute to national defence and critical national infrastructure.
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.
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.
This calls for incentives for mega projects entailing high investment and investment in mega facilities abroad.
The Policy calls for leveraging the Government e-Market Place (“ATMP”) and the Public Procurement (Preference to Make in India) Order 2017 to create a market for electronic and cyber security products.
The Policy argues for special support for developing core competencies in the following strategic sub-sectors:
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.
ATMP is to be promoted for certain semiconductor ICs, including memory chips, on security grounds.
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