The Department of Electronics and Information Technology (DeitY) is planning to set up a Rs 10,000 crore innovation and development fund for the electronics and IT sectors, reports the Economic Times. DeitY mentions it will rope in existing venture capitalists (VC) for selecting startups for funding, in each of which it will invest up to a maximum of 20 percent.
In the report, DeitY also mentions that electronics import currently cost the government $100 billion, hence the need to increase domestic production. With this initiative, DeitY hopes to increase the Intellectual Property Rights (IPR) created in the country, and aid developmental efforts.
Note that DeitY had recently drafted an Internet of Things policy which included promoting Venture Funds of Electronic Development Fund, directed to support companies in IoT related domains like processors, sensors and other electronics, and launching a program to drive exports from IoT products and services.
This EDF fund recommended setting aside Rs 250 crores to support technology focused startups in products and technology space and Rs 100 crore for providing grants for collaborative research program between industry and academia in areas related to semiconductors and electronics, in addition to subsidising a venture fund of around $50 million for startups to undertake R&D and product development.
Earlier this year, the Indian government had received proposals worth Rs 65,000 crore to invest in the fields of semiconductors and electronics manufacturing, as a part of its drive to encourage manufacturing of electronics in India and reducing reliance on imports. A semiconductor fab is also being set up in Prantij, Gujarat, and is expected to be operational by late 2017.
NASSCOM tie-up: The government has tied up with venture capitalists in the past, notably the Karnataka government with NASSCOM to set up a 50,000 sq ft startup warehouse in Bangalore to provide over a 100 startups with work space and internet connectivity.
Similarly, in the recently drafted IoT policy, DeitY said it would set up incubation centres (National Centre of Excellence) under PPP mode with NASSCOM and other industry players, to host startups, SMEs and students. The government will provide Rs 100 crore in funds for this, with the rest coming from NASSCOM or other appointed associations.