The Cabinet on Tuesday brought out new National Electronic Policy (NEP) with a set of incentives to promote domestic manufacturing in the electronics sector. Main thrust of the programme is to achieve $400 billion turnover in the sector by 2025.

Decisively, the NEP comes out with new support mechanisms for the electronics sector. First one is the interest subvention scheme that is already provided to sectors like agriculture. Here, the government will provide an interest subsidy of 4 per cent on loans upto Rs 10000 crores. The loan amount should spend on plant and machineries.

Credit Guarantee Fund Scheme

Another incentive under the NEP is the Credit Guarantee Fund Scheme that will provide default guarantee to banks up to 75% of the loan amount on plant and machinery for loans up to Rs 100 crores.

With the Credit Guarantee Fund, small and new investors need not provide any third-party collateral like bank guarantee to secure loans.

Electronics Manufacturing Clusters 2.0

The NEP also upgrades the existing Electronics Manufacturing Clusters scheme into Electronics Manufacturing 2.0. As part of the upgraded EMC 2.0, there comes an innovative arrangement – the Sovereign Patent Fund. Here, the Fund will be launched to acquire IPs for chips and to ship components for some commonly used product IPs. The objective is to ensure that the chips and components can be made available to Indian firms at low cost.

Similarly, the policy also proposes to create fresh industrial clusters to promote full value chain generation. According to the Minster of Electronics and IT, latest technologies such as artificial intelligence, medical/defence electronics and consumer electronics will be a focus of this policy.


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