Page 26 - CII Artha Magazine 1

Sector in Focus
B. Deepening the supported CAS (conditional
Component Value Chain access system) for set top Electronics:
across the entire boxes.
ecosystem
Similarly, a global innovation
challenge for designing of
The domestic electronics for educational tablets for the The Fuel for
industry is characterised by semiconductors and chip sets
lack of a component
ecosystem which leads to its masses could be encouraged.
dependence on imports. High New Age
dependency on imported Besides, the next focus should
inputs raises cost and impedes be on maximizing domestic Additionally, high import software. However, to realize
competitiveness. A right mix value addition and promoting dependency for electronic this, India needs to address a
of policy realignment coupled Design in India, besides Make parts has heightened the few challenges like cost
with new targets is required. in India. For this, the Automobiles vulnerability of the Indian disadvantages arising out of
automobile industry from
high land, logistics, capital
know-how available with global supply chain transaction costs, etc.
The government has, no doubt Government owned R&D disruptions as witnessed from
announced the PLI scheme for laboratories should be made recent shortage of Recognizing the above
components. However, the 5-6 freely accessible to industry, semiconductors leading to challenges, Government has
per cent incentive on outsourced R&D needs to be loss of sales opportunity 3 recently approved PLI for
estimated at Rs 1,800-2,000
semiconductor and display
incremental sales, envisaged incentivized on the lines of crore in the past few months. ecosystem with an outlay Rs
under the scheme, is not In-house R&D, Technology I ndian Automotive Industry very high value of import This import dependency of 76,000 crore (> US$10
enough to achieve scale in this Acquisition Fund be created has seen phenomenal content which continues to the Indian automotive billion) to setup over 20
sector and accordingly would for liberal assistance in filing growth and progress in last increase. In case of industry is bound to increase semiconductor design,
automotive electronics
two decades coupled with
discourage manufacturers patents and a Guarantee Fund intensified use of electronics. imports, it accounted for due to advent of C.A.S.E. components manufacturing
from indigenizing production. be created to help R&D This has coincided with huge US$2.14 billion (~Rs 15,000 (Connected, Autonomous, and display fabrication (FAB)
2
units. This step is highly
Shared and Electric) mobility.
Hence, the government should houses to raise working growth and proliferation of crores) in FY2019-20 which It is estimated that demand synergic to earlier PLIs
review the scheme by capital. information technology and was 11 per cent of total for India’s automotive announced in the areas of
expanding the incentive from digitization, as also, triggered automobile imports. The key electronics will increase from electronics, autos and ACC
the present 5-6 per cent and D. Other Suggestions by growing concerns around reasons for such high level of US$4.29 billion (Rs 30,000 (Advanced Chemistry Cell)
vehicular emissions, safety and
imports are lack of local
widen the eligibility criteria. A impact on environment. supply chain, technical/design crores) in FY2019-20 to having the potential to
US$10 billion (Rs 70,000
enhance India’s deep
revamped PLI would facilitate Similarly, the government capability for semiconductors crores) by 2026 . localization capability, thereby
4
scale economies from should also look at other & Display Fabrication Units improving the cost dynamics
domestic production and also options such as leveraging WHILE VALUE OF (FABs) manufacturing, and India’s overall electronics of Indian manufactured
encourage SMEs to strengthen upcoming FTAs (UK & the ELECTRONICS absence of globally market is expected to grow products, making end
PRODUCTION HAS
competitive scale.
5
the supply chain and reduce EU) towards enhancing GROWN; HIGH VALUE and reach US$400 billion by products competitive and
our dependence on imports. exports, incentivizing OF IMPORT CONTENT 2025. If India does not take safeguarding India from global
steps to localize electronics
supply chain disruptions.
manufacture of products not IS WORRISOME now, it will not only be left
C. Encouraging Design-led currently produced in India, behind but it will also have
Manufacturing facilitating EoDB, among huge impact on country’s
others. The Indian electronics trade deficit. Having one of
manufacturing ecosystem is
For ensuring that the industry still in a nascent stage which the largest demands for GOVERNMENT'S PLI
electronic parts, India is an
remains competitive (by To conclude, a robust policy is predominantly an assembly attractive investment SCHEME FOR
facilitating domestic IP environment would help the operation. Although, the value destination for their SEMICONDUCTORS
creation), even after the PLI & country to realise the huge of India’s domestic electronics large-scale manufacturing. AND DISPLAY
other benefits expire, a push opportunity awaiting India to has grown from US$27.20 ECOSYSTEM BODES
billion (Rs 1,90,366
to R&D is most essential. For emerge as a global hub for crore) in 2014-15 to This can also provide WELL FOR BOOSTING
this, the government should electronics and meet the US$76.0 billion (Rs India an opportunity DOMESTIC
to leverage its global
explore innovative solutions targets envisioned in the NPE 5,33,670 crore ) in leadership in PRODUCTION
1
for the sector such as a model 2019. 2020-21, this has
based on the Government led
domestic manufacturers Mr. Vikram Kirloskar, Past President, CII; Chairman,
CII Manufacturing Council and Vice Chairman, Toyota Kirloskar Motor Ltd
1 Ministry of Electronics and
Information Technology (MEITY)
2 SIAM
3 Media sources
4 SIAM
25 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 5 Invest India ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 26
QUARTERLY JOURNAL OF ECONOMICS
QUARTERLY JOURNAL OF ECONOMICS
DECEMBER 2021 DECEMBER 2021