The Government of India has launched an Electronics Development Fund (EDF), which will invest up to Rs 2,200 crore in electronic startups, reports DNA. The EDF is part of the Electronics Development Fund Policy unveiled in July last year. The EDF will be operational till March 2017, and investments will be made by the government in a staggered manner.
The fund was launched at the Make In India week in Mumbai by Ravi Shankar Prasad, the Minister for Communications & Information Technology. He said that the fund will invest in five electronics sectors – consumer, communications, auto, defence and medical. Interestingly, he also said that medical electronics are segregated from general pharma electronics, and will be given the incentives electronics manufacturers are entitled to.
In December 2014, we’d reported that DeitY was planning to set up the EDF, a Rs 10,000 crore innovation and development fund for the electronics and IT sectors. DeitY would rope in existing venture capitalists for selecting startups for funding, in each of which it would invest up to a maximum of 20%. DeitY mentioned that electronics import at that time cost the government $100 billion, hence the need to increase domestic production, increase the Intellectual Property Rights created in the country, and aid developmental efforts. This was emphasized in Digital India week which took place in July last year.
In November, DeitY appointed CanBank Venture Capital Fund as fund manager to manage the Government’s Electronics Development Fund (EDF) and was inviting participation from seed, angel and daughter funds. The government said at the time that it aimed to achieve ‘net zero’ imports by 2020.
Electronics manufacturing in India: The Indian government has been encouraging domestic companies to start manufacturing electronics goods within the country instead of importing them and had approved a National Policy on Electronics. The National Manufacturing Competitiveness Council (NMCC) had also proposed the creation of a $1 billion fund to encourage telecom equipment manufacturing in India. The Cabinet had approved the setting up of two semiconductor wafer fabrication units at a cost of Rs 63,412 crore in India, in February last year. Since then, various smartphone manufacturers have said they will start manufacturing in India or have already started doing so. Read more about it here.
Image source: MadLab Manchester Digital Laboratory