India to take leaf out of China, Korea models on electronics

Bangalore, Feb 21(PTI) After creating a brand for itself insoftware, India is now keen to replicate the story inelectronic manufacturing space, taking a leaf or two out ofsuccess stories of China and Korea.

A key official said today the Government recognises theopportunity of converting India into a global destination forelectronic hardware manufacturing, not merely for select highinvestment projects, but around the whole value chain.

"The Government is in the process of developing variouspolicy initiatives which would help realise this goal in closepartnership with industry, academia and other stakeholders",Joint Secretary in the Department of Information Technology,Ajay Kumar said at India Semiconductor Association''s VisionSummit here.

The attempt in these proposed policies is to address"disability cost" vis-a-vis competing destinations like Chinaand Korea, Kumar said. Officials explained that disabilitycost involves power, logistics and disruptions in supply chainmanagement.

"The need is to learn from best practices establishedelsewhere and build on our own strengths", he said.

Kumar said the Government has developed a roadmap for makingIndia a global destination for electronic hardwaremanufacturing and it is under active consideration of thegovernment.

He said the Government is considering to launch a modifiedspecial incentive package which, while retaining the targettedfinancial support in the special incentive package in 2007,would address deficiencies in the existing scheme and try tomeet the needs of all types of units in the electronics valuechain.

The Government is also planning to set up an electronicsdevelopment fund to promote innovation, research anddevelopment and intellectual property.

Noting that China has a "China-1000 programme" intended tobring back into the country top 1000 researchers of Chineseorigin working overseas, he said India also needs to take asimilar step by suitable incentives, adding, the Government,in fact, proposed to do so.

While India has established its own niche in software andBPO, time has come to demonstrate its leadership position bybuilding its own capabilities in IC design, IC fabrication anddesign and manufacture of electronics products.

Officials said the modified special incentive package mightinclude promotion of the sector in clusters and also give apush for small and medium enterprises.

Kumar said the electronic hardware manufacturing sectorcurrently suffers from "confidence deficit" and also it neededto be branded to attract talent, like the software sector.

He pointed out that India currently lags behind theelectronic systems design and manufacturing capabilities.

According to the assessment of the task force constituted bythe Department of IT in 2009, the demand for electronichardware in India is projected to grow from USD 45 billion in2009 to USD 400 billion by 2020.

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