The Cabinet on Thursday cleared the National Policy on Electronics 2012, which aims to provide fiscal incentives to Electronic System and Design and Manufacturing (ESDM) sector to meet country’s domestic demand and develop capabilities to export ESDM products to other countries.

The policy largely eyes to create an eco-system for a globally competitive Electronic System Design and Manufacturing (ESDM) sector in the country to achieve a turnover of about $ 400 billion by 2020 involving investment of about $ 100 billion and employment to around 28 million people at various levels.

During 2008-09 the demand of electronic products in India stood at $ 45 billion and is expected to increase by more than 9 fold. Going with the current pace, domestic production can cater to a demand of $ 100 billion by 2020 as against demand of $ 400 billion. The rest would have to be met by imports.

The new policy also seeks to boost emerging chip design and embedded software industry to achieve global leadership in Very Large Scale Integration (VLSI), chip design to achieve a turnover of $ 55 billion by 2020. It will also focus on sprucing up the supply chain of raw materials, parts and electronic components to raise the indigenous availability of these inputs from the present 20-25% to over 60% by 2020, the government has said.

The government intends to focus on postgraduate education and to produce about 2500 PhDs annually by 2020 as well. It will also attempt to create Intellectual Property (IP) in the ESDM sector by increasing fund flow for R&D, seed capital and venture capital for start-ups in the ESDM and nano-electronics sectors.