‘Encourage cluster approach’, say experts
12 December 2011
Industry experts and policy makers are calling for a national electronics strategy to develop laboratory-to-fabrication clusters across India and build a vibrant ecosystem for the 65 billion dollar market.
High-volume sourcing of components and final products has hampered the growth of electronics manufacturing base in recent years, said Mr. R. Chandrashekhar, Secretary at the ministry of communications and information technology while addressing a national conference organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“Growth trends show the demand for electronic products to cross 400 billion dollars by 2020,” he said. “A national strategy has to be formulated through discussions with key stakeholders including existing manufacturers and members of the MSME sector, industry associations, respective government departments and regulatory bodies.”
This is important as excessive dependence on imports could involve national security issues in future. Chandrashekhar called for creating industrial clusters to meet the need for fostering innovation and manufacturing in the electronics sector.
Ajay Shankar, member secretary at the National Manufacturing Competitiveness Council, said that domestic manufacturing is essential to sustain GDP growth momentum and generate mass employment. “There is a growing consensus that the electronics industry needs a special emphasis. It will encourage value generation, revenue generation and employment generation,” he said, adding that practical solutions should be worked out.
ASSOCHAM secretary general D.S. Rawat called for establishing centres of excellence for incentivising collaborative research and development initiatives between MSMEs and MNCs. “Absence of feeder industries is the biggest hurdle for electronics manufacturers to set operations,” he said. “The government needs to take quick steps to start developing an ecosystem which will attract manufacturing investments.”
Others present were Mr. Lakshmi Narayan, Advisor at the Videocon Industries, Mr. P.K. Sandell, Chairman of Eltec Systems, and Mr Ajai Chowdhury, Chairman of HCL Infosystems.
According to a paper prepared by ASSOCHAM and Frost & Sullivan, the 2020 guidance is expected to catapult India’s contribution to the 1.8 trillion dollar global electronics industry to 15% from the current contribution of 2.5%.
Rising localisation of electronics manufacturing is a bellwether for propitious future of local semiconductor industry. Increasing assembling and manufacturing activities bode well for the semiconductor market as it awaits the dormant opportunity to turn active.
The past decade has been remarkable from a consumption perspective. Around 18 million mobile phones in 2003 to 172 million units in 2010, shipment of three million personal computers to over 8.2 million in the same period, from a non-existent LCD TV market in 2003 to rapidly growing sales of 3.5 million units in 2010.
The mobile revolution, an expanding middle class, growing emphasis on quality healthcare to the masses, increasing government spending on aerospace and defence, and enhancing significance of energy efficiency are all key trends influencing the growth of Indian electronics industry.
The Associated Chambers of Commerce and Industry of India say that the demand for skilled labour should be addressed through the establishment of specialised training centres with courses in electronics design, surface mount technology and floor automation.
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