Draft National Policy On Electronics 2018 | Latest Burning Issues

Table of Contents

WHAT HAPPENED RECENTLY?

The Ministry of Electronics and Information Technology (MEITY) on October 10, 2018 released the draft of the National Policy on Electronics 2018
The Ministry of Electronics and Information Technology will coordinate with the concerned ministries and departments to provide incentives to industry for robust expansion of electronics hardware manufacturing. MeitY will work out the details and facilitate decisions by the government.

PROBLEMS

The ESDM industry is of strategic importance as well. India is a signatory to the Information Technology Agreement (ITA-1) of WTO and Free Trade Agreements (FTAs) with various countries/ trading blocs such as ASEAN, Korea and Japan.

NOTES

The global electronics production is estimated to be USD 1,740 Billion in 2017, growing at a 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 Compound Annual Growth Rate (CAGR) of 26.7%, as against a growth rate of 5.5% in 2014-15.

NOTES

• 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.

WHERE INDIA LACKS

The production of Mobile Handsets, LCD/ LED TVs and Light Emitting Diode (LED) Products in the country has gone up significantly, and over the last few years, the demand of aforesaid electronic products is increasingly being met out of domestic production.
The production of LCD/ LED TVs has gone up from 0.87 crore units in 2014-15 to 1.6 crore units in 2017-18

CELL PHONES

In 2017-18, the production of Cellular mobile handsets reached approx. INR 1,32,000 crore, compared to INR 18,900 crore in 2014-15. Production of Cellular mobile handsets in volume terms reached 225 million units in 2017-18, as compared to production of 60 million units in 2014-15

DRAFT NATIONAL POLICY ON ELECTRONICS (NPE)

Draft NPE aims to promote domestic manufacturing in entire value-chain of ESDM sector for spur economic development in the country. It also aims to double the target of mobile phone production from 500 million units in 2019 to 1 billion by 2025 to meet objective. HIGHLIGHTS OF THE DRAFT

NATIONAL POLICY ON ELECTRONICS 2018

The policy targets production of one billion mobile handsets by 2025, valued at USD 190 billion (about Rs 13 lakh crore).
It is targeted to export 600 million mobile handsets valued at USD 110 billion (about Rs 7 lakh crore).
20 greenfield and three brownfield electronic manufacturing cluster projects have been sanctioned with the project outlay of Rs 3898 crore, including Rs 1577 crore from the Government of India.

OBJECTIVE OF DRAFT NATIONAL ELECTRONICS POLICY 2018

The set target of $400 billion turnover under it, includes targeted production of 1 billion mobile handsets by 2025, valued at $190 billion (approximately Rs. 13 lakh crore) and also 600 million mobile handsets valued at $110 billion (approximately Rs. 7 lakh crore) for export.
The policy aims to also 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 defence, agriculture, health, smart cities and automation.

NOTES

It proposes suitable direct tax benefits, including inter-alia investment-linked deduction under Income Tax (IT) Act for electronics manufacturing sector, for setting up of new manufacturing unit or expansion of an existing unit.
The proposal includes increasing tax benefits on expenditure incurred on R&D, enhancing rate of duty drawback for electronics sector, reimbursement of state levies and other levies for which input tax credit is not available, allowing duty free import of second-hand capital goods for electronics hardware manufacturing etc.