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How India supports indigenous technology manufacturing

According to a document released by the Ministry of Electronics and Information Technology, the “Digital India Compendium”, Digital India has generated new pathways for the creation and development of digital start-ups and indigenous technology in the country.

The digital entrepreneurship ecosystem that the initiative has created promotes domestic hardware and software manufacturing. This ecosystem has the potential to boost markets, create new jobs, and increase growth.

The demand for an Electronics System Design and Manufacturing (ESDM) is estimated to grow exponentially to US $400 billion by 2023. The document said India’s government attaches high priority to electronics and IT hardware manufacturing.

It is expected to generate domestic wealth and employment, apart from enabling a cyber secure ecosystem. The electronic manufacturing sector requires a continuous push with the overall objective of promoting Make in India, not only to meet domestic demands but also to promote India as a hub for electronics manufacturing.

The government wants to create a level playing field for domestic manufacturers to enable them to compete with imports in the sector by the rationalisation of the tariff structure, the simplification of procedures, and by providing incentives and upgrading infrastructure.

As a result of various measures taken over the last few years, the production of electronics hardware has shown a significant increase. Indian electronics hardware production has increased from IN ₹190,366 crores (approximately US $27.3 billion) in 2014- 2015 to IN ₹387,525 crore (approximately US $55.7 billion) in 2017-2018, registering a Compound Annual Growth Rate (CAGR) of 26.7%, against a growth rate of 5.5% in 2014-2015.

Several policy initiatives under Digital India and Make in India programmes are designed to facilitate investment, foster innovation, protect intellectual property, and build a robust manufacturing infrastructure.

Phased Manufacturing Programme – Mobile Manufacturing

To promote the domestic manufacturing of mobile handsets, the government created a phased manufacturing roadmap that outlines the appropriate fiscal and financial incentives to be promoted over a period of time.

There has been almost a 29% rise in the production of mobile phones since last year. It is estimated that about 670,000 people are employed (directly and indirectly) by units that manufacture mobile phones and parts or components.

Electronics Development Fund (EDF)

The Electronics Development Fund (EDF) has been set up as a “Fund of Funds” to participate in professionally managed “Daughter Funds”, which, in turn, will provide risk capital to companies developing new technologies in the area of electronics, Nano-electronics, and IT.

The EDF has invested IN ₹53.5 crores (approximately US $7.6 million) in six Daughter Funds, which have made investments of IN ₹177.3 crores (approximately US $25.5 million) in 47 ventures and start-ups. Total employment in supported start-ups was around 4,200.

Electronics Manufacturing Clusters (EMC)

EMCs aid the growth of the ESDM sector, help the development of the entrepreneurial ecosystem, drive innovations, and catalyse economic growth by increasing employment opportunities and tax revenues.

Modified Special Incentive Package Scheme (M-SIPS)

To offset disability and attract investments in electronic manufacturing, the Modified Special Incentive Package Scheme (M-SIPS) provides 20-25% subsidies for investments in capital expenditure to set up new manufacturing facilities or expand existing ones.

The M-SIPS incentives are available in any industrial area notified by the centre, state, or local authorities across the country. The incentives are available for 44 categories of electronic products and product components. The scheme was open to receiving applications until the end of 2018. The incentives are available for a period of five years from the date of approval of the application.

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