List of items under preferential market access to be expanded

Department of electronics will also write to ministries to enforce the policy more strongly

A new set of items is expected to be notified under the preferential market access (PMA) policy, which reserves a certain percentage of government procurement for domestically manufactured goods. This is in line with the central government’s ‘Make in India’ push. Currently, the list includes items like desktops, laptops, tablets, dot matrix printers and smart cards.

The department of electronics and information technology is also deliberating on ways to ensure the enforcement of the policy is done much more strongly. Since the government at the Centre is on a drive to make Aadhaar-based authentication the core of most government schemes, it is being contemplated that biometric authentication devices will be included under PMA. One of the first initiatives of the government — after it came to power earlier this year — was to initiate biometric-based attendance system for all central government employees. This required Aadhaar-based biometric devices to be installed in all government ministries.

According to a senior government official, new set of items will be added to the existing list of 16 products under the compulsory registration order. These will require a quality certification from the Bureau of Indian Standards (BIS) and include items like mobile phone batteries, LED lights, etc. “A revised policy of modified special incentives package scheme (M-SIPS) is likely to be finalised in the next two months,” the official added. The policy, which provides an extension to the existing sops, is aimed to be more investor-friendly and also extends its ambit to include white goods as well.

The government provides a subsidy of 20-25 per cent on capital expenditure for manufacturers of electronics under 26 categories. This did not earlier include what are termed ‘white goods’, such as washing machines and refrigerators.

A national centre of excellence on large area flexible electronics is also coming up at the Indian Institute of Technology — Kanpur and the government is in the process of finalising a policy on ‘internet of things’ (IoT). The aim of the policy is to create an IoT industry, worth $15 billion, in India by 2020. It has been assumed India would have a share of 5-6% of global IoT industry.

All these measures are aimed at creating a favourable ecosystem for electronics manufacturing in the country, as India currently imports a large portion of its electronic needs, widening the current account deficit.

The government also approved the policy for an electronic development fund to invest in electronics and information technology entrepreneurial ventures.

The fund, like a ‘fund of funds’, will invest in companies operating in four areas — electronic system & design, manufacturing, nano-electronics, and information technology. The professionally managed fund will provide risk capital to companies developing technologies in these areas.

The corpus of this open-ended fund will be managed by Sidbi or a similar financial institution, and the government’s investment will be decided on a case-to-case basis, determined by market dynamics.

It is expected to act as a catalyst for attracting foreign funds in these companies, as government investment in these ventures will give assurances to foreign companies.

ROAD MAP OF THE DEPT

• A new set of items will be added to the existing list of 16 products under the compulsory registration order
   
• These will require a quality certification from the Bureau of Indian Standards and include items like mobile phone batteries and LED lights, among others
   
• A national centre of excellence on flexible electronics is also coming up at the Indian Institute of Technology-Kanpur and the government is in the process of finalising a policy on ‘internet of things’