Revamping NPE 2012 To Achieve The Goal Of A US$ 400 Billion Turnover By 2020

India is one of the fastest growing markets for electronics in the world. There is potential to develop the electronic system design and manufacturing (ESDM) sector to meet India’s domestic demand as well as build capacity to export. The National Policy on Electronics (NPE) aimed to address the issue with the explicit goal of transforming India into a premier ESDM hub. The policy, however, is encountering a few government-made roadblocks and could do with a revamp. Here are some suggestions from ELCINA.

- EB Bureau

The National Policy on Electronics (NPE) was launched in 2012 to create an indigenous manufacturing ecosystem for electronics in India. The policy also aimed to foster the manufacture of indigenously designed chips to create a more secure ecosystem in the country. The policy envisaged that a turnover of US$ 400 billion by 2020, from local electronics manufacturing, would create employment for two million people.

The policy points were well circulated among industry stakeholders by the government as well as industry associations like Electronic Industries Association of India (ELCINA) at various global platforms over the last four years. Recently, the government has decided to put some of the action points in this policy on hold, considering the financial burden associated with them. However, according to ELCINA, doing this may convey a very negative image of the country and give the impression that India is no longer a viable investment destination for electronics manufacturing. ELCINA has, therefore, suggested a few points to revamp the policy rather than curtailing it. These suggestions may encourage the electronics industry while mitigating the financial burden on the government. ELCINA’s suggestions are collated below.

Suggestions on how to revamp the schemes under the NPE

The Modified Special Incentive Package Scheme (MSIPS) and the electronics manufacturing clusters (EMC) schemes are the two pillars of NPE 2012 that have successfully attracted investments in the electronics manufacturing sector. Implementation of both the schemes has been put on hold since early 2016, ostensibly due to questions from the Finance Ministry regarding their effectiveness and the financial burden imposed on the government’s resources.

1. Recommendations on MSIPS: