1. State of ESDM Initiatives:
Enhancing Value Addition in Electronics Manufacturing
S.K. Marwaha, Director, MeitY

2. INDIA - ADVANTAGE

3. Digital India
A flagship programme of the Government of India with a vision to transform India into a digitally empowered society
Skill Development
Electronics manufacturing is a key pillar - “Target: NET ZERO Imports by 2020”

4. National Manufacturing Policy
National Policy on Electronics, NPE 2012
Infrastructure
Market
Innovation
Human resources
25% contribution to GDP by 2022
Attract investment of $100B by 2020
Special Incentive Package (M-SIPS)
Electronics Manufacturing Clusters (EMC)
Semiconductor /
LCD FABs
Preferential Market Access
Standards
Tariffs
Export Promotion
Electronics Development Fund (EDF)
Centres of Excellence
Incubators
Indian Conditional Access System (iCAS)
Skill development
PhD Scheme
E&ICT Academies
Sector Skill Councils
This is a summary of the key government initiatives and schemes

5. 196 proposals involving ~USD 18B received
Modified Special Incentive Package Scheme (M-SIPS)
CAPEX subsidy: 20% (SEZ); 25% (Non-SEZ)
Production Subsidy: 10% of production turnover (ex-factory) for high investment projects
Reimbursement of CVD for capital equipment in Non-SEZ units
Incentives available across the value chain of Electronics
196 proposals involving ~USD 18B received

6. Electronics Manufacturing
Clusters (EMCs)
Illustrative Map of Electronic Manufacturing Clusters in India
Greenfield EMC – In Principle Approval
Common Facility Center
Greenfield EMC Approved
~7000 acres available across 18 States
Single Window Clearance
GREENFIELD EMC
BROWNFIELD EMC
50% of the project cost
Ceiling: INR 50 crores (~$8M) per 100 acres of land
75% of the project cost
Ceiling: INR 50 crore (~$8M)
Infrastructure includes: Roads, Power, Water, ETP’s, Testing Facilities, Tool room, Social infrastructure, etc.

7. Semiconductor/ LCD FABs
Duty Exemption on Capital Equipment and Inputs for use in semiconductor wafer fabrication/LCD fabrication and Assembly, Test, Marking and Packaging of semiconductor chips (ATMP) units
CAPEX Subsidy and Production Subsidy under M-SIPS
Income Tax Deduction for R&D expenditure and Investment-linked deduction under the Income Tax Act

8. Market incentives Preferential Market Access:
Preference in Government Procurement: At least 30% by value
Minimum domestic value add: 25% in Yr 1, increasing to 45% in Yr 5.
Tariffs:
Rationalized Tariff Structure - Favorable Taxation for Domestic Manufacturing
Differential excise duty dispensation: E.g. Mobile Handsets 1% excise and Tablets 2% excise, while CVD on
Export promotion:
Merchandise Exports from India Scheme (MEIS): Export 2% of FOB value
Export Promotion Capital Goods (EPCG) Scheme: Permits duty free import of capital goods

9. Schemes to boost Innovation
Electronics Development Fund: Fund of funds model Daughter Funds, with cumulative corpus of ~$1B
National Centres of Excellence: (i) Large Area Flexible Electronics (NCFLEX) at IIT-Kanpur and (ii) Technology on Internal Security (NCETIS) at IIT-Bombay
Centre of Excellence for Internet of Things (IoT) in Bengaluru
Electropreneur Park at University of Delhi; Incubation centers at IIT Patna (Medical Electronics), IIITM Kochi (Consumer Electronics)
Scheme for Technology Incubation and Development of Entrepreneurs (TIDE) in the area of Electronics, ICT and Management
iCAS for Set Top Boxes (STBs):
Indian Conditional Access System (iCAS) successfully developed
Available to all domestic STB manufacturers / operators at $0.5/ license for 3 years vs $4-5 per license of competing products

10. Human Resources
Skill Development in ESDM: Training of > 400K persons in 4 years under various schemes
Scheme for setting-up Electronics and ICT Academies: 7 Electronics & ICT Academies to be set-up at IITs/IIIT/NITs
Electronics Sector Skills Council of India (ESSCI) and The Telecom Sector Skill Council (TSSC) set up
Scheme for enhancing PhDs:
Target of 1500 PhDs in ESDM and 1500 in IT/ITeS
Fellowships and support to institutions

11. Opportunities for Electronics Manufacturing in India

12. Significant opportunities across segments
18%
27%
12%
30%
21%
16%
CAGR
USD (bn)
- LED Lighting ~3.6 bn by 2020
- Industrial Electronics ~USD 36 bn by 2020
- Solar capacity ~33 fold increase by 2020 (100 GW)
- 100 Smart cities ~ USD 1.1 bn allocated
- Broadband connection ~2 fold increase by 2020 (800 mn)
- Smart Cards, RFID & Biometrics ~multiply in next 10 years

13. Opportunities in Mobile Handsets
World’s second largest smart phone market
Incentives to promote manufacturing:
Differential Excise Duty structure for mobile handsets:
1% without input tax credit
12.5% CVD on imports
Phased Manufacturing Roadmap
Safety standards to curb sub-standard imports
Make not only for India but also for export: Export Incentive: 2%

14. Big boost to Mobile Handset Manufacturing
~2x Increase in Production: 6o million units in to 110 million units in
New manufacturing units:
Mobile handsets: 40
Components: 30
Direct employment: ~80,000

15. Make in India – Progress Mobile Manufacturing
Imports
Production

16. Opportunities in Tablets
Key demand drivers:
Digital India initiative
Demand from other government initiatives
Telecom boom
Incentives to promote manufacturing:
Preference to domestic manufacturers in Government procurement
Differential Excise Duty structure for Tablet Computers:
2% without input tax credit
12.5% CVD on imports
Make not only for India but also for exports: Export incentive: 2%

17. Opportunities in Set Top Boxes
Demand of 70 million for digitalization of broadcast network
Incentives to promote manufacturing:
Indian Conditional Access System (CAS): $0.5/ license vs. $4-5 / license for competing products
Duty advantage of 10% for indigenously manufactured Set Top Boxes
Differential Excise Duty Structure:
4% without input tax credit
12.5% CVD on imports
Safety standards to curb import of cheap, sub-standard products
Make not only for India but also for export - Export incentive: 2%

18. Opportunities in LED / LED Products
Demand for LEDs: USD 3.6 Billion by 2020, primarily driven by Govt scheme to convert traditional lights to LEDs
Incentives to promote manufacturing:
Preference for domestic manufacturers in Government procurement
Rationalized duty structure for domestic manufacturers
Make not only for India but also for export: Export incentive - 2%
LED
Government programmes
Preferential Market Access
Export

19. Semiconductor Manufacturing
Economic and strategic objectives for developing semiconductor FAB in India
Economic Opportunity
Strategic Objectives
India’s Semiconductor Demand
Telecom Products and Equipment
$ 3.3 B
$30.3B
National and Information Security
India’s Strategic Priorities
Information Technology and Office Automation
$2.1B
$10.5B
Sourcing stability and self-reliance
Semiconductor Manufacturing
Consumer Electronics
$0.43B
$1.8B
Reducing technology import bill
Others (Automotive, Industrial and Others)
$0.8B
$6.9B
Energy conservation and alternative sources R&D
2010
2020
Source: ISA – Frost & Sullivan India Semiconductor Market Update

20. Opportunities in Medical Electronics
Medical device manufacturing – FDI raised to 100%
Duty structure rationalized to promote manufacturing for Diagnostic Equipment, Pacemakers, Video Endoscopes, Blood Pressure Monitors and Glucometers

21. Opportunities in Solar PV
Huge demand: Target 100 GW by 2020 for Solar Energy
Rationalized Duty Structure to promote domestic manufacturing
Make not only for India but also for export

22. Internet of Things IoT - Emerging disruptive technology
Interconnectivity coupled with what sensors can now capture, has reached a very high level of maturity
Mammoth Opportunity for the world, as much as it is for India
Various initiatives proposed to be taken up under the Smart City concept and the Digital India Program to set up digital infrastructure shall provide a boost to the IoT Industry
IoT can help automate solutions to problems faced by various industries like agriculture, heath services, energy, security, etc.
Number of Internet-connected devices expected to be between billion by 2020
By 2020, the global IoT opportunity ~USD 300 Billion - Indian Market ~USD 15 Billion

23. What India Offers 1
Ready Land in Clusters and Single Window Clearance 2
Very Attractive Financial Incentives 3
Huge talent pool and support for skilled manpower 4
Support for Innovation and R&D 5
World’s fastest growing market

24. Design in India Make in India Electronics India! www.deity.gov.in/esdm
@Electronics_GoI