BackNew step to boost electronic manufacturing
New step to boost electronic manufacturing
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New Delhi: After introducing a slew of measures in the past year to boost electronic hardware manufacturing in the country, the department of electronics and information technology now plans to hire a marketing agency to woo investors.
India’s electronics manufacturing industry is projected to grow at an annual pace of 22% to reach $125 billion (Rs 6.8 trillion) by 2014 and $400 billion by 2020, according to government estimates.
If local manufacturing is not incentivized, India’s cost of importing electronics may exceed its crude import bill as the country may need to ship in at least $300 billion worth of electronics by 2020.
The mandate for the marketing agency will be to identify at least 50 electronics companies that could invest in India, set up board-level meetings with 25 of them with the information technology secretary or minister, and finally get at least five of them to invest in the country.
“We have initiated several policies to boost electronics manufacturing in the country but the need of the hour is to make targeted pitches at potential investors," said the official, who asked not to be identified. The agency will have to pin down the exact need of the foreign companies and offer them proposals tailored to their needs. “There is no point in offering everything to everybody. The pitch has to be customized, which will benefit both the country and the companies," the official said.
In terms of government sops, the official said several existing policies such as the modified special incentive package scheme (M-SIPS) and the electronic manufacturing clusters policy offer enough incentives to companies and no new ones are required.
Under M-SIPS, the government offers to take away a part of the manufacturing costs on account of infrastructure gaps relating to power or transportation, and under the second policy it will give sops of ₹ 50 crore each to 200 clusters set up by electronics manufacturing companies.
Jaijit Bhattacharya, president of the Centre for Digital Economy Policy Research, said the “government has to work towards providing a stable taxation regime, favourable labour laws and an conducive physical infrastructure so that companies get the confidence to invest in the country, which has been somewhat shaken lately".
As stated in the National Electronics Policy 2011, the government is aiming for a revenue of around $400 billion by 2020 in electronics manufacturing from an investment of around $100 billion.
The policy, which is awaiting the Union Cabinet’s nod, includes sops for setting up semiconductor fabrication units and industrial clusters for manufacturing electronics. It also specifies standards for electronics imports to stop spurious goods from entering the country.
As part of this policy, the cabinet recently approved a proposal to reserve 30% of all government electronic procurement for companies that can add at least 25% of domestic value to products in the first year of the policy being implemented.
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