Import of High-Tech Electronics

Import of High-Tech Electronics 

 As mentioned in the National Policy on Electronics (NPE 2012), the demand for electronics in the Indian market is expected to reach USD 400 Billion by 2020. Without intervention, at the current rate of growth, domestic production can cater to a demand of about USD 100 Billion by 2020.

While the future is difficult to predict, the value of imports of electronics goods during the period April-December 2015 was USD 31.06 Billion, which is less than the value of imports of petroleum products during the same period, which were USD 68.20.

Steps taken by the Government to promote Electronics Hardware Manufacturing in the country are given as under:-

1. Promotion of electronics hardware manufacturing is one of the pivotal Flagship Programme under “Digital India “campaign of the Government.

2. Modified Special Incentive Package Scheme (M-SIPS) provides financial incentives to offset disability and attract investments in the electronics hardware manufacturing including chip manufacturing. The scheme provides subsidy for investments in capital expenditure - 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.

3. Electronics Manufacturing Clusters (EMC) Scheme provides financial assistance for creating world-class infrastructure for electronics manufacturing units. The assistance for the projects for setting up Greenfield Electronics Manufacturing Clusters is 50% of the project cost subject to a ceiling of Rs. 50 Crore for 100 acres of land. For larger areas, pro-rata ceiling applies. For lower extent, the extent of support would be decided by the Steering Committee for Clusters (SCC) subject to the ceiling of Rs. 50 Crore. For setting up Brownfield Electronics Manufacturing Cluster, 75% of the cost of infrastructure, subject to a ceiling of Rs.50 Crore is provided.

4. Policy for providing preference to domestically manufactured electronic products in Government procurement is under implementation.

5. Electronic Development Fund (EDF) policy has been approved to support Daughter Funds including Early Stage Angel Funds and Venture Funds in the area of Electronics System Design and Manufacturing, Nano-electronics and IT. The supported Daughter Funds will promote innovation, R&D and product development within the country.

6. A meeting of State IT Ministers and State Government Officials was held on 26.08.2014 to encourage them to actively promote electronics manufacturing. Several States have shown keen interest.

7. Approvals for all foreign direct investment up-to 100% in the electronic hardware manufacturing sector are under the automatic route.

8. Under the Electronics Hardware Technology Park (EHTP) Scheme, approved units are allowed duty free import of goods required by them for carrying on export activities, CST reimbursement and excise duty exemption on procurement of indigenously available goods, as per the Foreign

9. Tariff Structure has been rationalized to promote indigenous manufacturing of electronic items.

10. Mandatory compliance to safety standards has been notified for identified Electronic Products with the objective to curb import of sub-standard and unsafe electronics goods. As of now, 30 electronic products are under the ambit of this Order.

11. Government has approved setting up of two semiconductor wafer fabrication (FAB)manufacturing facilities in India.

12. Two Schemes for skill development of 90,000 and 3,28,000 persons, respectively in the electronics sector have been approved to provide human resource for the industry.

13. The Scheme to enhance the number of PhDs in the Electronic System Design and Manufacturing (ESDM) and IT/IT Enabled Services (ITES) sectors has been approved. 3000 PhDs are proposed to be supported under the Scheme.

14. Keeping in view the huge indigenous requirement on account of roadmap for digitalization of the broadcasting sector, Indian Conditional Access System (iCASTM) has been developed to promote indigenous manufacturing of Set Top Boxes (STBs). The iCASTM is available to domestic STB manufacturers at a price of USD 0.5 per license for a period of three years as against market price of USD 4-5 per license for other competing products. The implementation of iCASTM in the cable networks has already started.

15. An Electropreneur park has been approved for providing incubation for development of ESDM sector which will contribute IP creation and Product Development in the sector.

16. National Centre of Excellence in Flexible Electronics (NCFlexE) is being set up in IIT Kanpur with the objectives to promote R&D; Manufacturing; Ecosystems; Entrepreneurship; International Partnerships and Human Resources and develop prototypes in collaboration with industry for commercialisation.

17. Centre for Excellence on Internet of Things (IoT) is being set up in Bengaluru jointly with NASSCOM.

18. An Incubation center with focus on medical electronics is being set up at Indian Institute of Technology, Patna.

19. The Department of Electronics and Information Technology (DeitY) provides funding under several schemes for promotion of R&D, including support for International Patents in Electronics & IT (SIP-EIT); Multiplier Grants Scheme and Scheme for Technology Incubation and Development of Entrepreneurs (TIDE) in the area of Electronics, ICT and Management.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.


Going Slow on Future Liberalisation Commitments Under WTO 

The outcomes in the area of agriculture in the Nairobi MinisterialConference are results of the demands of developing countries including India. Among these, the Decision on Public Stockholding for Food Security Purposes and a Special Safeguard Mechanism for the developing countries acknowledge the special requirements of the developing countries to protect the livelihood and food security of their farmers. India was at the forefront of negotiating these outcomes in Nairobi. In trade negotiations, including multilateral trade negotiations in the World Trade Organization (WTO), India has always taken a consistent stand to protect the interest of the country and its farmers. 

The mandate of the Doha round of trade negotiations in the WTO envisaged the reductions of, with a view to phasing out, all forms of export subsidies. The Uruguay Round WTO Agreement on Agriculture (AOA) permits use of export subsidies to the Members that used them during the base year 1986-88. Mostly developed countries like the US, EU, Norway, Australia, Canada, New Zealand, Switzerland, Liechtenstein and some developing countries like Brazil, Columbia etc. are entitled to provide export subsidies as per Agreement on Agriculture (AoA). India could use only a special and differential provision of AoA that allows developing countries to use subsidies aimed at reducing the cost of marketing including internal and external transport as well as handling and processing costs provided that these are not applied in a manner that would circumvent export subsidy reduction commitments. As per the Ministerial Decision adopted in Nairobi, developed countries will immediately remove export subsidies, except for a few agriculture products, and developing countries will do so by 2018, with a longer time-frame in some limited cases. Developing countries will retain the flexibility of covering marketing and transport costs for agriculture exports until the end of 2023, while the poorest and food-importing developing countries will enjoy additional time to cut export subsidies. This Decision ensures that countries will not resort to trade-distorting export subsidies. 

India remains committed to the Doha Development Agenda, which has development at its core. If it is concluded as per its mandate, it will result in better integration of developing countries in the global trading system. 

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today. 


Cities Picked up Under ‘Start up India’ Scheme 

The Action Plan for Startup India launched by the Prime Minister on 16th January 2016 envisages setting up of 7 New Research Parks modeled on the Research Park at IIT Madras. Indian Institute of Science, Bengaluru in Karnataka has been selected for establishment of a research park in the Action Plan. Similarly, the Action Plan envisages setting-up/scaling-up of 18 Technology Business Incubators (TBI) at NITs/IITs/IIMs etc. NIT Calicut, IISER Thiruvanthapuram and IIM Kozhikode in Kerala have been selected for setting up of Technology Business Incubators. 

Government of India has approved the Atal Innovation Mission (AIM) on 24th February 2016. No separate city-wise/Statewise allocation has been made under the Atal Innovation Mission. 

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today. 


Special Rebate on Investments by NRIS and Foreign Companies 

Government has put in place an investor-friendly policy on FDI, under which FDI, up to 100%, is permitted, under the automatic route, in most sectors/activities including investments from Non-Resident Indians (NRIs). Foreign Direct Investment (FDI) policy is reviewed on an ongoing basis, with a view to making it more investor friendly, including for NRIs. 

The extant FDI policy allows special dispensation for NRI investments in the constructiondevelopment sector and Civil Aviation sector. Further, the investments made by NRIs, PIOs and OCIs and companies owned by such NRIs, PIOs and OCIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations on non-repatriation basis are deemed to be domestic investment at par with the investment made by residents. 

Government of India has put in place a liberal and investor friendly FDI policy. FDI inflows depend on a host of factors such as availability of natural resource, market size, infrastructure, political and general investment climate as well as macro-economic stability and investment decision of foreign investors. 

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today. 


Increase in Industrial Production 

Index of Industrial Production (IIP) prepared by Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MOSPI) at 2004-05 base year measures performance of industrial production in the country. The growth of IIP in 2015 (January to December) was 3.3 per cent compared to 1.8 percent in the same period of 2014. 

The Organisation for Economic Co-operation and Development (OECD) database provides estimates of Index of Industrial Production (IIP) for OECD countries and for other selected countries at the base year of 2010. As per IIP data of OECD, India registered 3.2 per cent growth in 2015, which is the highest among the growth of IIP of Japan, Korea, UnitedKingdom, United States, European Union (combined index of 28 countries), Brazil and Russia. 

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today. 


Investment Commitmentsunder ‘Make In India’progamme 

            The investment commitments, through Foreign Direct Investment (FDI) equity inflows after launch of ‘Make in India’ Initiative in September, 2014 has been worked out as USD 45,682 million for the period between October 2014 – December 2015 (15 months after Make in India initiative launch).

            The Government is taking various measures for bringing investments to the country like opening up Foreign Direct Investment in many sectors; carrying out FDI related reforms and liberalization and improving ease of doing business in the country. Some of the recent initiatives are as below:

1.     100% FDI under the automatic route has been allowed in the specified rail infrastructure projects.
2.     Investment made by NRIs, PIOs and OCIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations on non-repatriation basis is now deemed to be domestic investment at par with the investment made by residents.
3.     The special dispensation of NRIs has also been extended to companies, trusts and partnership firms, which are incorporated outside India and are owned and controlled by NRIs.
4.     100% FDI under automatic route for manufacturing of medical devices has been permitted.
5.     FDI Policy on Insurance sector reviewed to increase the sectoral cap of foreign investment from 26% to 49% with foreign investment up to 26% to be under automatic route. Similar changes have also been brought in the FDI Policy on Pension Sector.
6.     In order to provide simplicity to the FDI policy and bring clarity on application of conditionalities and approval requirements across various sectors, different kinds of foreign investments have been made fungible under one composite cap.
7.     FDI up to 100% through automatic route has been allowed in White Label ATM Operations.
8.     Reforms in FDI Policy on Constructions Development sector include:
a)    Removal of conditions of area restriction of floor area of 20,000 sq. mtrs in construction development projects and minimum capitalization of US $ 5 million to be brought in within the period of six months of the commencement of business.
b)    Exit and repatriation of foreign investment is now permitted after a lock-in-period of three years. Transfer of stake from one non-resident to another non-resident, without repatriation of investment is also neither to be subjected to any lock-in period nor to any government approval.
c)    Exit is permitted at any time if project or trunk infrastructure is completed before the lock-in period.
d)    100% FDI under automatic route is permitted in completed projects for operation and management of townships, malls/ shopping complexes and business centres.

9.     Foreign investment up to 49% in defence sector has been permitted under automatic route along with specified conditions. Further portfolio investment and investment by FVCIs has been allowed up to permitted automatic route level of 49%. The foreign investment in access of 49% has been allowed on case to case basis with Government approval in case of access to modern and ‘state-of-art’ technology related manufacturing.

10.   FDI policy on Broadcasting sector has also been amended as under:

New Cap and Route
(1)Teleports(setting up of up-linking HUBs/Teleports);
(2)Direct to Home (DTH);
(3)Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability);
(4)Mobile TV;
(5)Headend-in-the Sky Broadcasting Service(HITS)

(Up to 49% -Automatic route
Beyond 49% - under Government route) Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs)) Broadcasting Content Services Terrestrial Broadcasting FM (FM Radio),
Government route  Up-linking of ‘News & Current Affairs’ TV Channels Up-linking of Non-‘News & Current Affairs’ TV Channels
Automatic route
Down-linking of TV Channels

11.   Government has decided to introduce full fungibility of foreign investment in Banking-Private sector. Accordingly, FIIs/FPIs/QFIs, following due procedure, can now invest up to sectoral limit of 74%, provided that there is no change of control and management of the investee company.
12.   Government has opened certain plantation activities namely; coffee, rubber, cardamom, palm oil tree and olive oil tree plantations for 100% foreign investment under automatic route.
13.   It has been decided that a manufacturer will be permitted to sell its product through wholesale and/or retail, including through e-commerce under automatic route.
14.   Government has reviewed single brand retail trading (SBRT) FDI policy to provide that sourcing of 30% of the value of goods purchased would be reckoned from the opening of first store. In case of ‘state-of-art’ and ‘cutting-edge technology’ sourcing norms can be relaxed subject to Government approval. Further, an entity operating SBRT through brick and mortar stores has been permitted to undertake e-commerce activities as well.
15.   Indian brands are equally eligible for FDI to undertake SBRT. In this regard, it has been decided that certain conditions of the FDI policy on the sector namely; products to be sold under the same brand internationally and investment by non-resident entity/ entities as the brand owner or under legally tenable agreement with the brand owner, will not be made applicable in case of FDI in Indian brands.
16.   100% FDI is now permitted under automatic route in Duty Free Shops located and operated in the Customs bonded areas.
17. FDI policy on wholesale cash & carry activities has been reviewed to provide that a single entity will be permitted to undertake both the activities of SBRT and wholesale.
18.   100% FDI is now permitted under the automatic route in Limited Liability Partnerships (LLP) operating in sectors/activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions. Further, the terms ‘ownership and ‘control’ with reference to LLPs have also been defined.
19.   Regional Air Transport Service (RSOP) has been opened for foreign investment up to 49% under automatic route. Further, foreign equity cap of activities of Non-Scheduled Air Transport Service, Ground Handling Services have been increased from 74% to 100% under the automatic route.
20.   Foreign investment cap on Satellites- establishment and operation has now been raised from 74% to 100% under the government route.
21.   Foreign investment cap on Credit Information Companies has now been increased from 74% to 100% under the automatic route.
22.   Government has decided that for infusion of foreign investment into an Indian company which does not have any operations and also does not have any downstream investments, Government approval would not be required, for undertaking activities which are under automatic route and without FDI-linked performance conditions.
23.   FDI policy on establishment and ownership or control of the Indian company in sectors/activities with caps requiring Government approval has been reviewed to provide that approval of the Government will be required if the company concerned is operating in sectors/ activities which are under Government approval route rather than capped sectors. Further no approval of the Government is required for investment in automatic route sectors by way of swap of shares.
24.   Certain conditions of FDI policy on Agriculture and Animal Husbandry, and Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities have been simplified.
25.   In order to achieve faster approvals on most of the proposals, the Government has decided to raise threshold limit for approval by FIPB to Rs 5000 crore.
26.   Further, Finance Minister in its Budget Speech on 29.2.2016 has announced that 100% FDI will be allowed through FIPB route in marketing of food           products produced and manufactured in India. This will benefit farmers, give impetus to food processing industry and create vast employment opportunities.
This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.


Identification of States that will Lead NIMZ Project 

Eight Investment Regions along the Delhi Mumbai Industrial Corridor (DMIC) project have been announced as NIMZs:-

i.                     Ahmedabad-Dholera Investment Region, Gujarat
ii.                  Shendra-Bidkin Industrial Park city near Aurangabad, Maharashtra
iii.                Manesar-Bawal Investment Region, Haryana
iv.                Khushkhera-Bhiwadi-Neemrana Investment Region, Rajasthan
v.                  Pithampur-Dhar-Mhow Investment Region, Madhya Pradesh
vi.                Dadri-Noida-Ghaziabad Investment Region, Uttar Pradesh
vii.              Dighi Port Industrial Area, Maharashtra ; and
viii.            Jodhpur-Pali-Marwar Region in Rajasthan

Fourteen NIMZs outside the DMIC region have also been given in-principle approval (i) Nagpur in Maharashtra (ii) Prakasam in Andhra Pradesh (iii) Chittoor in Andhra Pradesh (iv) Medak in Telangana (v) Hyderabad Pharma NIMZ in Rangareddy and Mahbubnagar Distts., Telangana (vi) Tumkur in Karnataka (vii) Kolar in Karnataka (viii) Bidar in Karnataka (ix) Gulbarga in Karnataka (x) Kalinganagar, Jajpur District in Odisha (xi) Ramanathapuram District of Tamil Nadu (xii) Ponneri Taluk, Thiruvallur District, Tamil Nadu (xiii) Auraiya District in Uttar Pradesh; and (xiv) Jhansi District in Uttar Pradesh.

Out of these NIMZs, the NIMZs at (i) Prakasam in Andhra Pradesh and (ii) Medak in Telangana have been granted final approval.

            The National Investment & Manufacturing Zones (NIMZs) are conceptualized as integrated industrial townships with all important elements necessary to help the growth of manufacturing, e.g. state-of-the-art infrastructure; clean and energy efficient technology; simplified business regulations; and the necessary social and institutional infrastructure.

            This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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