India: Draft National Policy On Electronics 2018

 On October 10 2018, the Ministry of Electronics and Information Technology (MeitY), Government of India, issued the "National Policy on Electronics 2018" (NPE 2018) for the Electronics System Design and Manufacturing (ESDM) Sector of India.26 NPE 2018 aims to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by creating an enabling environment for the industry to compete globally.

NPE 2018 is the result of the roadmap devised under NPE 2012, which recognized the electronics sector's unique dynamics, significant opportunity and structural challenges, and laid the way forward for the development of electronics sector in the country. NPE 2018 policy is holistic, investor-friendly and marketdriven, and focused on upgradation of infrastructure, providing incentives to offset disabilities, promoting innovation and human resource development.

As stated in NPE 2018, the global electronics production is estimated to be USD 1,740 Billion in 2017, growing at a Compound Annual Growth Rate (CAGR) of 5%. Indian electronics hardware production has increased from INR 1,90,366 crore in 2014-15 to an estimated INR 3,87,525 crore (USD 59 Billion) in 2017-18, registering a CAGR of 26.7%, as against a growth rate of 5.5% in 2014-15. India's share in the global hardware electronics production is 3.4%. The share of domestic electronics production in India's GDP is 2.3%. The import of electronic goods was of the order of USD 53 Billion in 2017-18. With the demand for electronics hardware expected to rise rapidly to about USD 400 Billion by 2023-24, India cannot afford to bear a huge foreign exchange outgo on import of electronics alone. Accordingly, NPE 2018's endeavor for promoting domestic electronics hardware manufacturing, for a high value addition is of critical importance.

NPE 2018 aims to 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 defense, agriculture, health, smart cities and automation. Being export-led, it is also targeting to develop core competencies in all the sub-sectors of electronics, including electronic components and semiconductors, telecommunication equipment, medical electronics, defense electronics, automotive etc.

MeitY will coordinate with the concerned Ministries/ Departments to provide incentives to industry for rapid and robust expansion of electronics hardware manufacturing within the country. As per NPE 2018, MeitY shall work out details and facilitate decisions by the Government on the measures indicated hereunder:

1. Create eco-system for globally competitive ESDM sector by incentivizing domestic manufacturing and compensating for disabilities;

2. Establish a body in MeitY for developing and setting standards for Electronics (including Components as well as Fabless Industry), IT, e-Governance, etc.

3. Set up an institutional mechanism within MeitY for mandating compliance to standards for electronics products;

4. Create/ upgrade Lab infrastructure/ capacity for testing of electronic goods, including cyber security;

5. Ease of Doing Business: Strengthen and leverage Invest India, the National Investment Promotion and Facilitation Agency, which was established as a single window for global investors, for facilitation of investment in ESDM sector as a one-stop shop for facilitation of investments / businesses, coordination with the State Governments, establishment of Joint Ventures, obtaining speedy approvals by coordinating with the concerned Government agencies on behalf of the investors, and handholding them till the manufacturing unit becomes functional;

6. Encourage industry-led R&D and innovation in all sub-sectors of Electronics;

7. Provide support for significantly enhancing availability of skilled manpower in the ESDM sector;

8. Export promotion: Provide attractive package of incentives for promotion of indigenization and export of electronics, and hence empowering Indian ESDM exporters by facilitating global market access;

9. Enhance understanding of cyber security issues/ concerns, risks and mitigation measures thereof pertaining to electronic products;

10. For the requirements of Government Sector, an exclusive Government owned testing and evaluation facility to be set up;

11. Promote the use of secure chips by design and systems to reduce cyber security risks;

12. Promote Start-up eco-system for development of photonics, nano-based devices and cyber security products;

13. Provide special package of incentives for Mega Projects which are extremely high-tech and entail huge investments, such as Fabrication (FAB) units (Semiconductors, Display, LED, Solar Cells), including granting infrastructure status to these units;

14. Promote investment in mega facilities abroad, such as an existing FAB facility, including support for setting up of R&D units abroad, where eco-system exists for a particular technology;

15. Preferential Market Access: Encourage the State Governments to adopt the Public Procurement (Preference to Make in India) Order 2017 (PPO 2017), in procurement of electronic products. Leverage Government eMarket Place (GeM) to create/ expand the market for domestically manufactured electronic products;

16. Provide special support for developing core competencies in the relevant subsectors.

From the governance structure perspective, NPE 2018 provides for creating institutional mechanism for implementation of various schemes/programmes under the Policy, such as constituting a High-Level Advisory Committee to review the implementation status and provide strategic recommendations/ decisions from time to time. With NPE 2018, it is apparent that the Government now seeks to build on that foundation to propel the growth of ESDM industry in the country. The NPE 2018 is conceived as a comprehensive plan of action with deliverables and will provide the requisite framework for the same.

Footnote

26 http://meity.gov.in/writereaddata/files/Draft_NPE_2018_10thOct2018 .pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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