Cabinet to discuss National Electronics Policy on Thursday

The Union Cabinet is likely to consider on Thursday a national policy aimed at promoting manufacturing of electronic hardware into a USD 400 billion industry by 2020.

"The National Policy on Electronics(NPE) is on the agenda of the Cabinet scheduled for Thursday," a source said.

According to the draft policy, the country would need an investment of about USD 100 billion in the next eight years. The USD 400 billion industry can create employment for 28 million people.

As per the proposal, telecom products specifically mobile phones will be declared goods of special importance under the Central Sales Tax Act.

At present,India meets about 75-80 per cent of its electronic requirements through imports.
As per estimates, demand in the Indian market was USD 45 billion while the domestic production was about USD 20 billion in 2008-09. The actual value-addition in the domestically produced electronic product ranges between 5-10 per cent in most cases.

At the current rate of growth, the domestic production can cater to a demand of USD 100 billion in 2020 as against a demand of USD 400 billion. This means there could be a demand-supply gap of nearly USD 300 billion by 2020, estimates suggest.

Under a part of the NPE which has already been approved by the government, incentives up to Rs 10,000 crore will be provided during the 12th Five Year Plan period.

Subsidy for investments in capital expenditure with a limit of 20 per cent for investments in Special Economic Zone and 25 per cent in non-SEZs has also been approved.