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Cabinet approves Electronics Policy

Posted: 29 Oct 2012     Print Version  Bookmark and Share

Keywords:electronics policy  electronic system design and manufacturing  modified special incentive package  fabs  semiconductor chips 

The Cabinet has approved the National Policy on Electronics 2012. The policy is expected to create an indigenous manufacturing eco-system for electronics in the country. It will foster the manufacturing of indigenously designed and manufactured chips creating a more cyber secure ecosystem in the country.

�The draft National Policy on Electronics was released for public consultation and it has now been finalized based on comments from various stakeholders,� an official statement said.

Under the policy, government aims to create an eco-system for a globally competitive electronic system design and manufacturing (ESDM) sector in the country to achieve a turnover of about $400 billion by 2020 involving investment of about $100 billion and employment to around 28 million people at various levels.

The domestic production in 2008-09 was about $20 billion. At the current rate of growth, domestic production can cater to a demand of $100 billion in 2020 as against a demand of $400 billion and the rest would have to be met by imports.

Highlights of the policy:

1. To build on the emerging chip design and embedded software industry to achieve global leadership in very large scale integration (VLSI), chip design and other frontier technical areas and to achieve a turnover of $55 billion by 2020.

2. To build a strong supply chain of raw materials, parts and electronic components to raise the indigenous availability of these inputs from the present 20-25 per cent to over 60 per cent by 2020.

3. To increase the export in ESDM sector from $5.5 billion to $80 billion by 2020.

4. To significantly enhance availability of skilled manpower in the ESDM sector. Special focus for augmenting postgraduate education and to produce about 2500 PhDs annually by 2020.

5. To create an institutional mechanism for developing and mandating standards and certification for electronic products and services to strengthen quality assessment infrastructure nationwide.

6. To develop an appropriate security ecosystem in ESDM.

7. To create long-term partnerships between ESDM and strategic and core infrastructure sectors - Defence, Atomic Energy, Space, Railways, Power, Telecommunications, etc.

8. To become a global leader in creating Intellectual Property (IP) in the ESDM sector by increasing fund flow for R&D, seed capital and venture capital for start-ups in the ESDM and nanoelectronics sectors.

9. To develop core competencies in strategic and core infrastructure sectors like telecommunications, automotive, avionics, industrial, medical, solar, Information and Broadcasting, Railways, etc through use of ESDM in these sectors.

10. To use technology to develop electronic products catering to domestic needs, including rural needs and conditions, as well as international needs at affordable price points.

11. To become a global leader in the Electronic Manufacturing Services (EMS) segment by promoting progressive higher value addition in manufacturing and product development.

12. To expedite adoption of best practices in e-waste management.

13. To source, stockpile and promote indigenous exploration and mining of rare earth metals required for manufacture of electronic components.

To achieve these objectives, the policy proposes the following strategies that include provision of fiscal incentives for investment, setting up of electronic manufacturing clusters, preferential market access to domestically manufactured electronic products, setting up of semiconductor wafer fabrication facilities, industry friendly and stable tax regime.

Based on Cabinet approval, an Empowered committee has been constituted to identify and shortlist technology and investors for setting up two semiconductor wafer manufacturing fabrication facilities.

Separate proposals have also been considered for approval of Modified Special Incentive Package for the ESDM Sector and for setting up of Electronics Manufacturing Clusters (EMCs).

The strategies also include setting up of a National Electronics Mission with industry participation and renaming the Department of Information Technology as Department of Electronics and Information Technology (Deity).

�Electronics is characterized by high velocity of technological change. Consequently the life cycle of products is declining. As a result, the value of design and development in the product has increased quite significantly. Given India's growing strength in chip design and embedded software, the increasing importance of design in product development has potential to make India a favoured destination for ESDM.�

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