National Telecom Policy 2012

National Telecom Policy 2012 (NTP 2012) has the vision of Broadband on Demand and envisages leveraging telecom infrastructure to enable all citizens and businesses, both in rural and urban landscape, to participate in the internet and web economy thereby ensuring equitable and inclusive development across the nation. It further states that a concerted effort to boost manufacturing activity is now exigent as robust economic growth in the country is leading to an extraordinarily high demand for electronic products in general and telecom products in particular. NTP-2012 provides a road map for India to become a leader in cutting edge, state of the art technologies through R&D and creation and incorporation of Indian IPRs in global standards. Along with host of recommendations to promote R&D, Product Development, Commercialisations, the main objectives of National Telecom Policy are:

  • Promote innovation, indigenous R&D and manufacturing to serve domestic and global markets, by increasing skills and competencies.
  • Create a corpus to promote indigenous R&D, IPR creation, entrepreneurship, manufacturing, commercialisation and deployment of state-of-the-art telecom products and services during the 12th five year plan period.
  • Promote the ecosystem for design, Research and Development, IPR creation, testing, standardization and manufacturing i.e. complete value chain for domestic production of telecommunication equipment to meet India telecom sector demand to the extent of 60% and 80% with a minimum value addition of 45% and 65% by the year 2017 and 2020 respectively.
  • Allotment of spectrum through auction.
  • Focus on Broadband and Rural Telephony to cover maximum geographical reach.
  • Support from USOF for cellular and broadband services in rural areas.
  • National Optical Fibre Network(NOFN) for connectivity to 2,50,000 Gram Panchayats.

National Policy on Electronics 2012

  • The National Policy on Electronics 2012 has notified with a vision to create a globally competitive Electronic Systems Design and Manufacturing (ESDM) industry to achieve a turnover of about USD 400 billion by 2020 involving investment of about USD 100 billion and employment to around 28 million people at various levels.
  • Electronics Manufacturing Clusters Scheme to provide world-class infrastructure for attracting investments in the ESDM Sector.
  • To build a strong supply chain of raw materials, parts and electronic components to raise the indigenous availability of these inputs from the present 20-25 per cent to over 60 per cent by 2020.
  • To increase the export in ESDM sector from USD 5.5 billion to USD 80 billion by 2020.
  • To become a global leader in creating 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 Nanotechnology electronics sectors.
  • Modified Special Incentive Package Scheme (MSIPS) to offset disability and attract investments in ESDM Sectors like telecom equipments including mobile sets, Opto-electronics, IT hardware, Bio-metric/ identity devices, Consumer electronics, Power supply for ESDM products, Medical electronics, Semiconductor wafering, Solar photovoltaic, Semiconductor chips & components, Fabs for ESDM products, LEDs, LCDs, Avionics, Electro-mechanical components, nano-electronics, e-waste processing, Automotive electronics, Electronics manufacturing services etc.
  • 25% of capital expenditure if the ESDM unit is in non-SEZ and 20 % of capital expenditure if the ESDM unit is within SEZ. This capex subsidy is available for investments made within 10 years from the date of approval of the project.

M-SIPS incentives would be available to units which would be within the Electronics Manufacturing Clusters (EMCs).

For availing incentives under M-SIPS scheme there are minimum investment requirements defined for different products varying from Rs. 50,000 Million for Memory Fab to Rs.10 million for Mobile phone and accessories. The overall financial ceiling under the M-SIPS will initially be limited to Rs. 1,00,000 million during the 12th Five Year Plan.

FDI Policy in Telecom Sector

  • FDI of 100% (49% under automatic route) for all telecom services.
  • FDI of 100% is permitted through the automatic route in telecom equipment manufacturing.