National Electronics Policy 2019

The Union Cabinet has approved a National Electronics Policy 2019 which will replace the National Policy of Electronics 2012 (NPE 2012).

The National Electronics Policy 2019, aims to position India as a global hub for Electronics System Design and Manufacturing – (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally. It proposes to build on the existing policy of 2012, to propel the growth of the ESDM industry in the country.

Salient Features of NPE 2019

• Create eco-system for globally competitive ESDM sector: Promoting domestic manufacturing and export in the entire value-chain of ESDM.
• Provide incentives and support for manufacturing of core electronic components.
• Provide special package of incentives for mega projects which are extremely high-tech and entail huge investments, such as semiconductor facilities display fabrication, etc.
• Formulate suitable schemes and incentive mechanisms to encourage new units and expansion of existing units.
• Promote Industry-led R&D and innovation in all sub-sectors of electronics, including grass root level innovations and early stage Start-ups in emerging technology areas such as 5G, loT/ Sensors, Artificial Intelligence (Al), Machine Learning, Virtual Reality (VR), Drones,   Robotics,   Additive   Manufacturing,   Photonics,   Nano-based devices, etc.
• Provide   incentives   and   support   for   significantly   enhancing availability of skilled manpower, including re-skilling.
• Special thrust on Fabless Chip Design Industry, Medical Electronic Devices Industry, Automotive Electronics Industry and Power Electronics for Mobility and Strategic Electronics Industry.
• Create Sovereign Patent Fund (SPF) to promote the development and acquisition of IPs in ESDM sector.
• Promote trusted electronics value chain initiatives to improve national cyber security profile.

Targets under the New Policy

1. Promote domestic manufacturing and export in the entire value-chain of ESDM for economic development to achieve a turnover of USD 400 billion (approximately INR 26,00,000 crore) by 2025.
2. Targeted production of 1.0 billion (100 crore) mobile handsets by 2025, valued at USD 190 billion (approximately INR 13,00,000 crore), including 600 million (60 crore) mobile handsets valued at USD 110 billion (approximately INR 7,00,000 crore) for export.
3. The policy has introduced “easier to implement” incentive schemes, including an interest subvention scheme and credit default guarantee, to replace some of the existing ones under the NEP2012.
4. It proposes to provide interest subsidy of 4% on loans up to ?1,000 crore on plants and machinery. Further, in case of larger loans, the subsidy would be limited to ?1,000 crore.
5. A fund will be created to provide default guarantee of up to 75% to banks for plant and machine loans of up to ?100 crore. The scheme will be on the pattern of credit guarantee being provided by SIDBI for the SME sector.
6. To help create an ecosystem, the policy has pitched for 2.0 version of the Electronics Manufacturing Cluster Scheme, under which infrastructure support will be provided for a group of industries that are part of the product supply chain rather than individual industries.
   1. It has also proposed a sovereign patent fund to acquire intellectual property for chips and chip components.

• The NPE 2019 when implemented will lead to formulation of several schemes, initiatives, projects, etc., in consultation with the concerned Ministries/ Departments, for the development of ESDM sector in the country.
• It will enable flow of investment and technology, leading to higher value addition in the domestically manufactured electronic products, increased electronics hardware manufacturing in the country and their export, while generating substantial Employment opportunities.
• The provision of default guarantee will eliminate the need for small and new investors to provide third-party collateral.