As part of the “Digital India” agenda of the Government, it is envisaged to develop the Electronics System Design and Manufacturing (ESDM) sector to achieve net zero imports by 2020. Setting up of EDF is one of the important strategies which would enable creating an electronics industry ecosystem in the country in this regard.
Creating a vibrant ecosystem of innovation, research and development (R&D) and with active industry involvement is essential for a thriving electronics industry. It is with this objective that an Electronic Development Fund (EDF) is proposed to be set up as a “Fund of Funds” to participate in “Daughter Funds” which in turn will provide risk capital to companies developing new technologies in the area of electronics, nano-electronics and Information Technology (IT).
Assuming that the average participation of EDF in Daughter Fund is 25%, the policy will help leverage four times Government funding in the area of R&D and innovation. It will help create a battery of Daughter funds and Fund Managers who will be seeking good start-ups (potential winners) and selecting them based on professional considerations.
The policy provides a framework where the decision to support R&D is based on market conditions and through industry professionals well versed with industry requirements.