India's emergence as a global software services and solutions hub is one of the biggest successes of modern, liberalised India. In the past four decades, India's software industry value has grown to $8.1 billion, employing around 4 million. It is be explored if India can replicate this success in hardware and electronics. India is a key importer of electronic goods, especially from Asian countries China and Taiwan. But, the government is keen to position the country as a leader in electronics and hardware. As of 2019, India's electronic imports stood at Rs. 1.15 lakh crore and exports are at just $11.8 billion. By 2025, electronics exports could reach $180 billion. And this is possible if the government provides long-term policy support. 

Several schemes and policies have been announced to provide an impetus to the country's nascent electronics industry, increase exports and mostly, become aatmanirbhar. The COVID19 pandemic and consequent global shutdown of manufacturing affected the nation's import levels, leading to industry and government colluding a serious and sustained investment in electronics manufacturing. Moreover, technologies of the future like AI, cloud and edge computing, and IoT can be further accelerated with locally produced hardware. 

So there's a pretty substantial case to be made for India to establish a foothold as a hardware manufacturing. Let's read some of the policies that have been proposed by the government to fructify the industry's commitment to enhance manufacturing. 

National Electronics Policy: Proposed by MeitY, the policy envisions positioning India as a hub for Electronics System Design & Manufacturing (ESDM) to develop core components, including chipsets. The scheme also hopes to promote industry-led innovation in all sub sectors of electronics and early stage startups in emerging technologies like 5G, loT/ Sensors, Artificial Intelligence (Al), Machine Learning, Virtual Reality (VR), drones, robotics, additive manufacturing, photonics and nano-based devices. It also provides a special thrust on fabless chip design, medical and automotive electronics. NEP has a target to hit a turnover of USD 400 billion by 2025, including targeted production of 1.0 billion mobile handsets by 2025, valued at USD 190 billion, including 600 million mobile handsets valued at USD 110 billion for export.

To further facilitate large-scale manufacturing, development of a supply chain ecosystem, and building of new manufacturing clusters in the country, each electronic manufacturing scheme has been carefully constructed to incentivize the electronics manufacturing industry.

Production Linked Incentive Scheme (PLI): PLI for Large Scale Electronics Manufacturing proposes a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain including mobile phones, electronic components and ATMP units. This includes production of semiconductor devices including transistors, diodes, thyristors; Printed Circuit Boards (PCB), sensors, transducers, actuators, crystals for electronic applications 

Production Linked Incentive Scheme for IT Hardware: PLI for IT hardware proposes a financial incentive to boost domestic manufacturing and attract large investments in the value chain. The scheme seeks to incentivise companies to utilise the existing installed capacity to fulfil the increasing domestic demand. Product-linked incentives of upto INR 7,300 crore will be awarded over a period of 4 years.

The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS): SPECS aims to strengthen the manufacturing ecosystem for electronic components and semiconductors. Target manufacturing of electronic components and semiconductors through the scheme will help meet domestic demand, increase value addition and promote employment opportunities in this sector. Incentives of up to INR 3,285 crore will be awarded under the scheme over a period of eight years. This scheme particularly targets electronic components, semiconductors, specialized sub-assemblies and capital goods for these items

The Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme: EMC2.0 seeks to strengthen the infrastructure base for the electronics industry and deepen the electronics value chain in India. The development of industry-specific facilities like Common Facility Centers, Ready Built Factory, Sheds/Plug and Play facilities will not only strengthen supply chain responsiveness and promote the consolidation of suppliers but also decrease time-to-market and lower logistics costs. EMC 2.0, therefore, provides financial incentives for creating quality infrastructure as well as common facilities and amenities for electronics manufacturers. Financial Incentives of up to INR 3,762 Crore will be disbursed over a period of 8 years.

Electronics Development Fund (EDF) Policy: Setting up of EDF was one of the important strategies which would enable creating an electronics industry ecosystem in the country. Creating a vibrant ecosystem of innovation, Research and Development (R&D) with active industry involvement is essential for a thriving electronics industry. Electronics Development Fund (EDF) is set up as a “Fund of Funds” to participate in professionally managed “Daughter Funds” which provide risk capital to companies developing new technologies in the area of Electronics, Nano-electronics and Information Technology (IT).

Modified Special Incentive Package Scheme (M-SIPS): The scheme provides incentive for investments on capital expenditure- 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.