Cabinet may approve National Electronics Policy within a week

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The government is likely to approve National Policy on Electronics (NPE), which aims to create a domestic electronics manufacturing ecosystem worth $400 billion by 2020, within a week, says a PTI report.

“Inter-ministerial consultation is complete on NPE and cabinet note has been sent. We expect the cabinet to approve the policy within a week,” a senior government official said.

According to draft of NPE, which was put in public domain, the policy aims to promote domestic manufacturing of electronic products. The aim is to achieve a US$ 400 billion turnover by 2020, involving investment of about US$ 100 billion and employment to around 28 million people at various levels.

As per estimates, demand in the Indian market was US$ 45 billion in 2008-09 and is expected to reach US$ 400 billion by 2020. The domestic production in 2008-09 was about US$ 20 billion. The actual value addition in the domestically produced electronic product ranges between 5 to 10 per cent in most cases.

At the current rate of growth, the domestic production can cater to a demand of $100 billion in 2020 as against a demand of US$ 400 billion. This means there could be a demand-supply gap of nearly US$ 300 billion by 2020.

Under NPE, the government has set a target to increase the export in electronic system design and manufacturing (ESDM) sector from the estimated US$ 5.5 billion at present to US$ 80 billion by 2020 and provide stable tax regime for period of 10 years.
As per the proposal, telecom products specifically mobile phones will be declared goods of special importance under the Central Sales Tax Act.

The government also aims to promote around 200 clusters across country under NPE which will house full ecosystem for manufacturing electronic products like design house, training cent res, manufacturing facility among others.

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