Government issues draft National Policy on Electronics 2018

Union Ministry of Electronics and Information Technology has issued draft  National Policy on Electronics 2018 (NPE 2018) for Electronics System Design and Manufacturing (ESDM) Sector of India. It sets an ambitious target of creating $400 billion electronics manufacturing industry by 2025. with mobile phone devices segment accounting for three-fourths of production.

It also proposes to push the development of core competencies in all sub-sectors of electronics including electronic components and semiconductors, automotive electronics, defense electronics, industrial electronics, strategic electronics etc. It also proposes to set up 20 greenfield and three brownfield electronic manufacturing cluster projects have been sanctioned with the project outlay of 3,898 crores, including Rs 1,577 crore from Central Government

About National Policy on Electronics 

  • Draft NPE aims to promote domestic manufacturing in entire value-chain of ESDM sector for spur economic development in the country also aims to double the target of mobile phone production from 500 million units in 2019 to 1 billion by 2025 to meet an objective.
  • It replaces existing incentive schemes like Modified Special Incentive Package Scheme (M-SIPS), with schemes that are easier to implement such as interest subsidy and credit default guarantee etc. It also takes into consideration interest subsidy and credit default guarantee in order to new units and the expansion of existing units in the electronics manufacturing sector
  • 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 the 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 

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