Thursday, May 01, 2014: The Indian Government, through the Department of Electronics and Information Technology (DeitY), has instituted a number of forward-looking policies to foster the growth of the Indian electronics ecosystem. These policies are aimed at holistic development of the ESDM industry by offering specific incentives for the development of each element in the value chain. These forward looking policy measures include:
National Policy on Electronics (NPE)
The objective of the NPE is to create an ecosystem for a globally competitive ESDM sector in the country by attracting investment of about USD 100 billion and generating employment for around 28 million people at various levels. The ultimate aim of the policy is for the Indian ESDM sector to develop core competencies in strategic and core infrastructure sectors like telecommunications, automobile, avionics, industrial, medical, solar, information and broadcasting,railways, intelligent transport systems, etc.
National Manufacturing Policy (NMP)
The government has brought out the NMP to increase the growth of the manufacturing sector to 12 to 14 percent over the medium term and enable manufacturing to contribute at least 25 percent to the National GDP by 2022.
Modified Special Incentive Package Scheme (MSIPS)
The MSIPS aims to offset cost disabilities and attract investments in the India ESDM sector through an INR 10,000 crore corpus. Subject to certain investment thresholds, subsidies to the tune of 20 per cent for SEZ units and 25 per cent for non-SEZ units will be given on capital expenditure along with reimbursement of excise/CVD.
Setting up semiconductor fabrication units
The Government of India has received the applications of two
consortia (IBM, Jaypee Group, TowerJazz; STMicroelectronics, HSMC) to establish 2 semiconductor wafer fabrication units in Gujarat and Noida with the aim of operating at 20 nm process node within two years of initial operations and reaching a capacity of at least 40,000 WSPM of at least 300 mm size. Various incentives are being offered by the government to this effect: 25 per cent subsidy
on capital expenditure and growth capital expenditure, reimbursement of CVD and excise duty, exemption from basic customs duties and 200 per cent deduction on R&D activities, among other incentives such as reimbursement of training costs, deduction for income tax and various forms of viability gap funding.
Electronic Manufacturing Clusters (EMCs)
The government is offering financial support for the development of EMCs. For greenfield EMCs, assistance will be given up to 50 per cent of the project cost subject to a ceiling of INR 50 crore for every 100 acres of land. For brownfield EMCs, assistance will be given up to 75 percent of the project cost subject to a ceiling of INR 50 crore.
Electronics Development Fund (EDF)
The EDF aims to create an ecosystem of R&D in electronics in India which will promote IP generation and large scale manufacturing, while simultaneously fostering the growth of the ESDM ecosystem. The focus of EDF will largely revolve around small and medium enterprises (SME) in line with the goal of promoting innovation and job.
creation.
