The Union Cabinet on February 19, 2019 approved the National Electronics Policy (NEP) 2019, which provides incentives to promote domestic manufacturing of electronics with a target turnover of $ 400 billion by 2025.
Main features of the policy are following:
• An ‘interest-subvention scheme’, under which the government intends to provide interest subsidy of 4 per cent on loans up to Rs. 1,000 crore on plant and machinery. For larger loan amounts, the subsidy will be limited to Rs. 1,000 crore.
• Under a new ‘Credit Guarantee Fund Scheme’, the government will create a fund to provide default guarantee to banks up to’ 75 per cent of the loan amount on plant and machinery for loans up to Rs. 100 crore. This will eliminate the need for small and new investors to provide third-party collateral, which is required by banks at present.
• Electronics Manufacturing Clusters 2.0 will replace the existing EMC scheme.
• A Sovereign Patent Fund will be launched to acquire IPs for chips and to ship components for some commonly used product IPs, so that they can be made available to Indian entrepreneurs at a very low cost.
• As part of the new policy, the government is making clusters in which no individual company will manufacture, but a full value chain will be’ in place. A bigger industry will be supported by smaller industries.
• Latest technologies such as artificial intelligence, medical/ defence electronics and consumer electronics will be a focus as part of this policy.
• Government is aiming at India achieving a share of 32 per cent of global electronics manufacturing, from 26.7 per cent in 2017-18.
• NPE 2019 will also give special thrust on fabless chip design, automotive electronics and power electronics for the mobility and strategic electronics industry.