The government plans to bring in new incentives and schemes to attract global firms from countries like Japan, Taiwan and South Korea to set up their manufacturing base into India.
The new electronics policy to be unveiled soon and will focus on opening up Indian market for exports, a senior official from the ministry of IT and electronics told DNA Money.
"The plan is to attract sub-assembly manufacturers in India," the official said.
New incentives will be offered for achieving this objective, while the existing ones such as Modified Special Incentive Package Scheme (MSIPs) and electronic cluster scheme might be phased out.
"The market size for assembling is around 34-35 crore units per year and currently, we are doing 22.5 crore units per unit. The next move is to open the market for exports to realise the true potential of the Indian market," the official further said.
Apart from the assembly line, there are about 300-400 suppliers whose components go into electronic goods. The government plans to tap such suppliers to set up their base in India.
Even in China, there is about 40-45% value addition that goes into manufacturing a product and these value-added components gets imported from countries such as Japan, South Korea and Taiwan, the official said. "We aim to bring sub-assembly manufacturers from all these countries into India, which will make India an export hub as well. The focus is also on getting new technologies into India."
The draft of the new policy is expected to be ready in a month. According to Make in India Strategy for electronic products prepared by Niti Aayog in 2016, India has not had much success in penetrating the export markets so far. At $6 billion, India has less than 1% share in the world markets.
The national electronics policy and the existing incentive schemes of MSIPS and electronics cluster policy were notified in 2012. The funding in schemes such as MSIPs has dried up as the scheme is likely to get expired by end of this year and most of the other existing schemes will lapse by the end of this year. Electronic Development Fund has been one of the other major schemes rolled out by the government towards domestic manufacturing in the electronics sector.
NEW POLICY
- New electronics policy is likely to focus on opening up Indian market for exports
- Plan is to attract sub-assembly manufacturers to set up their manufacturing base
- The draft of the new policy is expected to be ready in a month
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