Cabinet approves new electronics policy, targets a turnover of $400 billion by 2025

It will also create employment for one crore people, says Ravi Shankar Prasad

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The Cabinet on Tuesday approved the new National Electronics Policy, 2019, which targets a turnover of $400 billion for the electronics system design and manufacturing (ESDM) sector by 2025.

"The new policy will make India a manufacturing and export hub. Many Chinese companies are looking towards India as a manufacturing destination," Minister for IT and Electronics Ravi Shankar Prasad said after the Cabinet meeting.

It will also create employment for one crore people, Prasad said, adding the focus would be on promoting new technologies such as artificial intelligence and medical electronics.

The $400 billion turnover will include targeted production of one billion mobile handsets by 2025, valued at $190 billion and 600 million mobile handsets valued at $110 billion for export, according to a senior official from the ministry.

A framework for comprehensive start-up ecosystem will be created in emerging technology areas such as 5G, internet of things (IoT), machine learning, drones, robotics, and their application in areas such as defence, agriculture, health, cybersecurity, smart cities and automation with a special focus on solving real-life problems.

The policy has come out with new schemes which will replace existing Electronics Manufacturing Clusters (EMC) scheme as well as Modified Special Incentive Package Scheme (M-SIPs). The new schemes include interest subsidy and credit default guarantee to encourage new units and expansion of existing units in electronics manufacturing sector.

DNA Money on May 21 had reported about the new electronics policy focusing on making India an export hub and the possibility of M-SIPs and electronic cluster scheme being phased out.

The last electronics policy was framed in 2012. Through the new policy, the aim is to incentivise and facilitate the establishment of global bases for manufacturing of components and sub-assemblies in India.

A special package will be given for mega projects which are high-tech and entail huge investments such as semiconductor facilities, display fabrication, photonics and LED chip fabrication units, including giving infrastructure status to these units, the official said.

A new Sovereign Patent Fund (SPF) will be created to promote the development and acquisition of IPs apart from promoting electronics value chain initiatives to improve national cybersecurity profile.

The global electronics production is estimated to be $1,740 billion in 2017, growing at a compound annual growth rate (CAGR) of 5%. Indian electronics hardware production has increased to about Rs 3,87,525 crore in 2017-18 from Rs 1,90,366 crore in 2014-15, registering a CAGR of 26.7%, as against a growth rate of 5.5% in 2014-15.

India's share in the global hardware electronics production is 3.4%. The share of domestic electronics production in India's gross domestic product is 2.3% and the import of electronic goods stood at $53 billion in 2017-18.

The new policy 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, a government statement said.


  • $400 bn – Turnover targeted for the electronics system design and manufacturing sector by 2025
  • $1 bn – Targeted mobile handset production by 2025, valued at $190 billion
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