Electronics policy roll-out could bring USD one billion investment

[1]

The clearance of the proposed National Policy on Electronics (NPE) is expected to bring in investments of around USD 1 billion in the mobile phone segment during the next three years.

"We estimate that investment of USD 750 million to USD 1 billion (into the country) can happen quickly to either start new production facilities or to expand existing plants on implementation of the proposed NPE," Indian Cellular Association President Pankaj Mohindroo told agencies.

He said 'the final version of the NPE along with the formal approval schemes like Electronic Development Fund and a robust incentive policy for encouraging exports of electronics would have to be in place' before investments proposals start crystallising.

According to ICA, the demand for mobile handsets in the country is expected to grow at the rate of 10 to 12 per cent per annum and will touch 280 million units by 2015.

"These demands can be met by producing handsets locally. The scale of manufacturing would require a stable taxation regime and other related fiscal and non-fiscal incentives both from the Union and State Governments," Mohindroo said.

Government within a fortnight has already announced two schemes to boost electronics manufacturing ecosystem in the country which is largely dominated by imports.

Electronics industry body ELCINA estimates the current size of electronics industry at present to be around USD 70 billion out of which around USD 40 billion of the requirement is met through imports.

The NPE draft forecasts such imports to touch a humongous USD 300 billion by 2020.

The Cabinet last week approved Modified Special Incentive Package Scheme under which the government will provide up to Rs 10,000 crore benefits to the industry over period of 10 years for promoting production of electronics products and components in India.

However, the scheme is open only for three years by when electronics manufacturing related projects can get approval under this scheme.

Early this month, the government had approved the Electronics Manufacturing Cluster scheme that will provide financial support of up to Rs 50 crore for setting up a cluster which will house the eco-system required for manufacturing specific kinds of devices.

According to IT minister Kapil Sibal, the proposed NPE should come up for decision in next Cabinet meeting.

The NPE has proposed steps to facilitate a turnover of around USD 400 billion in the domestic electronic industry within the next 8 years and aims to meet the requirement of the industry through indigenous production.