New Delhi: The Cabinet on Thursday cleared the National Policy on Electronics 2012, which aims to make the domestic electronic hardware manufacturing segment into a USD 400-billion industry by 2020.

"The Union Cabinet today approved the National Policy on Electronics 2012. The draft National Policy on Electronics was released for public consultation and it has now been finalized based on comments from various stakeholders," an official statement said.

Under the policy, government has set objective "to create an eco-system for a globally competitive ESDM (Electronic System and Design and Manufacturing) sector in the country to achieve a turnover of about USD 400 billion by 2020 involving investment of about USD 100 billion and employment to around 28 million people at various levels".

Demand for electronics product has been rapidly growing in the country.

However, the domestic production in 2008-09 was worth about USD 20 billion.

In the absence of a government initiative, it was estimated that at the current rate of growth, domestic production can cater to a demand of USD 100 billion by 2020 as against demand of USD 400 billion. The rest would have to be met by imports.

"This aggregates to a demand supply gap of nearly USD 300 billion by 2020. Unless the situation is corrected, it is likely that by 2020, electronics import may far exceed oil imports," the statement said. PTI PRS RAH NSUnder the Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) with various countries, the import of electronics hardware from these countries is allowed either at zero duty or at a duty which is lower than the normal duty rate which puts domestic manufacturers at a disadvantageous position.

To achieve the goal set in the policy government will facilitate "provision of fiscal incentives for investment, setting up of electronic manufacturing clusters, preferential market access to domestically manufactured electronic products, setting up of semiconductor wafer fabrication facilities, industry friendly and stable tax regime."

Based on Cabinet approval, a high level Empowered committee has been constituted to identify and shortlist technology and investors for setting up two semiconductor wafer manufacturing fabrication facilities (electronic chip making plants, the statement said.

Cabinet has earlier already approved a policy for providing preference to domestically manufactured electronic goods. It has also approved two separate proposals of Modified Special Incentive Package and Electronics Manufacturing Clusters (EMCs) scheme which are linked to goals of NPE 2012.


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