Kapil Sibal, Minister for IT and Telecom recently said that a separate fund of Rs 10 billion will be set up to encourage domestic production of electronic goods. This will be part of the electronics devices manufacturing policy that envisages creation of over 200 electronics clusters with a 10 year stable tax regime as incentive.
“The draft for this has been launched and we will accord cabinet approval in the next couple of months, and it will be formalised. It is now with the standing committee,” Sibal said, speaking to reporters at the 20th Nasscom India Leadership Forum 2012. “We need a policy framework for manufacturing electronic goods domestically,” he added.
The demand for electronic equipment in India is expected to rise to $400 billion by 2020 from $50 billion now. Domestic production of electronic goods now stands at $20 billion, which the government plans to increase to $75 billion by 2015 and $300 billion by 2020. “If local production is not encouraged, import of electronic goods may exceed that of oil by 2020. We need to give a clear message to global investors about our policies.”