Elcina for clusters to energise the Indian electronics sector

 Stating that at US$1.7 trillion, electronics sector remains one of fastest growing manufacturing industries in the world, it said despite this Indian electronics manufacturing sector still faces a number of pinpricks due to economic and technological factors necessiating Centre’s assistance to bolster the sector. Pointing out that while domestic markets are bullish and growing at brisk pace leading to recovery of demand from local manufacturers, there is even higher growth in imports thereby nullifying the sector’s advantages. Says Elcina Secretary General Rajoo Goel, the sector continues to remain uncompetitive in global markets given the domestic markets high dependence on imports.

Pointing out that though total electronics hardware sector market is estimated to touch US$400 billion by 2020, only less then 20 per cent components required for local equipment manufacturing are available from domestic sources. Even worse, for semiconductors, there is almost 100 per cent dependence on imports.

Setting up clusters/zones, he said, would help in creating an ecosystem for manufacture of various products by the sector and can comprise of various infrastructure facilities. This approach will result in synergies of component manufacturers, saving time and cost for assembly and packaging besides fostering competitiveness among players, he says. Further, high-tech manufacturing necessiates plug and play concept and absence of required investment would only make the sectoe reliant on foreign technology.

High cost of finance, power and logistics/regulatory and procedural problems are among bugbears dogging the industry and discourages capital intensive, high value-add investments in manufacture of components/parts which, in turn, require high and long term investments. Hence, if the Centre provides supportive fiscal and infrastructural environment, the sector will flourish.

Estimating that with current market growth rate of 25 per cent per annum, total demand for electronic components, products and equipment is well on its way to approach US$200 billion mark in next 5-6 years (2015), Elcina said manufacturing output of approximately US$125-150 billion is possible with right support. 

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