India to compete with China, Korea in electronic manufacturing

The government recognises opportunity of converting India into a global destination for electronic hardware manufacturing, not just for select high investment projects, but for the whole value chain, Joint Secretary in the Department of Information Technology Ajay Kumar today said at India Semiconductor Association's Vision Summit here.

"The government is in the process of developing various policy initiatives which would help realise this goal in close partnership with the industry, academia and other stakeholders," Kumar said.

The policies are aimed to address "disability cost", which involves power, logistics and disruptions in supply chain management vis-a-vis competing destinations like China and Korea, Kumar said.

He added, "The need is to learn from best practises established elsewhere and build on our own strengths."

Kumar said the government has developed a roadmap for making India a global destination for electronic hardware manufacturing and it is under active consideration of the government.

He said the government is considering to launch a modified special incentive package which, while retaining the targeted financial support in the special incentive package in 2007, would address deficiencies in the existing scheme and try to meet the needs of all types of units in the electronics value chain.

The government is also planning to set up an electronics development fund to promote innovation, research and development, and intellectual property.

Noting that China has a 'China-1000 programme' intended to bring back into the country top 1000 researchers of Chinese origin working overseas, he said, India also needs to take a similar step by suitable incentives, adding, the government, in fact, proposed to do so.

While India has established its own niche in software and BPO industries, time has come to demonstrate its leadership position by building its own capabilities in IC design, IC fabrication and design and manufacture of electronics products.

According to the assessment of the task force constituted by the Department of IT in 2009, the demand for electronic hardware in India is projected to grow from USD 45 billion in 2009 to USD 400 billion by 2020.

"The global demand is expected to be a mind-boggling USD 2400 billion by this time (by 2020). At the current rate of growth, the domestic production can take us to meet up to a demand of USD 104 billion and the remaining would have to be met by imports", Kumar added.