Page 33 - CII Artha Magazine 1

also evident from the annual
the sector has gone up from Rs.
depends entirely on imports
import bill which has
1,90,366 crore (US$27.20
for its semiconductor needs.
billion) in 2014-15 to about Rs.
escalated from Rs. 2,29,615
Already, electronics attracts
the second highest import
5,33,550 crore (US$76.0
crore 2014-15 to Rs. 3,85,081
crore in 2019-20 marking a
billion) in 2019-20, exhibiting an
bill and semiconductors
CAGR of 10.89 per cent.
account for a significant
impressive CAGR of 23 per
portion.
cent.
There is need to incentivize
What is notable is that India has
emerged as a leading
production of the high-tech
manufacturer of mobile phones
sectors such as
in recent years. In FY20, mobile
semiconductors in the
phone manufacturing
country. As per CII study, the
development of these
accounted for 41 per cent of
total production of the sector,
industries entails huge
In view of its pivotal role in
followed by industrial
investments and hence need
significant Government
electronics (18 per cent),
realising the US$5 trillion
consumer electronics (16 per
economy dream in near
support, both monetary (may
account for more than half of
future, the government has
cent), electronic components
the total project’s cost) and
identified electronics
(15 per cent), strategic
manufacture as a thrust
non-monetary (including
electronics (6 per cent) and
Components and
again a logical step to augment
growth of the sector. Some
computer hardware (4 per
semiconductor-grade
sector in policy formulation
of the challenges include
the electronics manufacturing
Semiconductors (SPECS) and
cent).
to boost electronics
infrastructure requirements,
Modified Electronics
capabilities in the country
infrastructure deficiency
land and preferential market
manufacturing in India, reduce
such as shortage of
Manufacturing Clusters
while the Modified Electronics
import dependence and
Similarly, major strides have
access); as has been the case
Manufacturing Clusters
high-quality power, deficien-
Scheme (EMC 2.0). A fourth
increase exports.
been made towards
in countries which are global
cies in transportation/logis-
Scheme (EMC 2.0) is specially
scheme, namely the
increasing exports of
leaders like Taiwan, South
tics, high cost of finance,
tailored to provide the
Production Linked Incentive
Korea, Israel and China.
electronics items. As per
The National Policy on
requisite infrastructure to
Scheme (PLI) for IT Hardware
inadequacy of domestic
Electronics (NPE) 2019 seeks
DGCI&S data, India’s exports
supply chain, complex
was notified in March 2021.
promote the establishment of
computer hardware and
to change the electronics
In this context, the recent
have grown from Rs. 38,263
greenfield and brownfield
regulatory system, limited
strategic electronics
incentive package worth
crore in 2014-15 to Rs.
landscape of the country by
R&D, among others. In
electronic manufacturing units
The production linked
(aerospace and defence). Of
he electronics industry,
Rs.76,000 crore announced
positioning India as a global
82,929 crore in 2019-20,
within the cluster to promote
addition, the absence of an
incentive (PLI) scheme for
these, three segments namely
considered to be the
by the government for the
notching an impressive CAGR
hub for domestic
innovation and steer growth in
large scale electronics
adequate manufacturing base
communication and broadcast
bedrock of every other
development of
manufacturing and export in
of 16.73 per cent. Indian
for different components viz,
manufacturing, mobile phone
the sector.
equipment, industrial
manufacturing activity in the
the entire value-chain of
semiconductors and display
exporters are also gradually
manufacturing and specified
semiconductors, passive and
electronics and consumer
country, has the potential to
getting integrated in the
Electronics System Design
manufacturing ecosystem, is
The wide array of calibrated
electronic components as well
electromechanical compo-
electronics comprise around
hasten our quest of emerging
and Manufacturing (ESDM).
global value chain.
laudable. The scheme , which
as the PLI for IT hardware,
nents etc is a deterrent to
and well-crafted measures
75 per cent of the overall
as a hub of global
The aim is to achieve a
would cover companies
investors as it increases the
medical devices including
introduced by the government
share of the market for
manufacturing, technology
engaged in silicon
Besides, the sector is showing
turnover of US$300 billion by
dependence on imports.
electronics has been described
together with growing
electronics industry.
and innovation. A flourishing
2025-26. It estimates that
semiconductor fabs, display
remarkable growth in
as a game changing initiative
demand, rising disposable
electronics industry, through
fabs, compound
demand. In fact, demand for
about 10 million jobs will be
incomes, the digital India vision,
for promoting local
Some of the constraints and
its ability to create value and
created from the
semiconductors, silicon
electronics hardware in India
the remedial measures to
electronics manufacturing in
among others would
jobs, can also contribute
photonics, sensors fabs,
is anticipated to perk up from
implementation of NPE.
help the industry are
the country. The scheme is
encourage domestic players to
significantly to bringing
semiconductor packaging
US$127 billion in 2019 to
elucidated below.
also expected to attract global
make forays into the sector.
dynamism to our
Similarly, in consonance with
and semiconductor design,
reach US$300 billion by
investments, facilitate
development journey. What is
would not only help to
2025-26. This surge in demand
the credo of Make in India,
Despite the above, the
A. Encouraging High Value,
investments in innovation,
also significant is that its
address the global shortage
Digital India and Atmanirbhar
is huge which brings a big
High volume
electronics industry is beset
technological upgradation and
applications are being
of semiconductors but
opportunity for the industry.
Bharat Abhiyan, and to realise
research and make India an
Manufacturing such as
with numerous disabilities
increasingly utilized by almost
would also go a long way
the vision of the National
However, unless there is a
Semiconductors
integral part of the global
Responding to the impetus
all segments of the economy.
huge ramp up in domestic
Policy on Electronics 2019,
toward making India an
supply chain.
provided by the government’s
capacity, it is likely that the
electronics hub.
the government launched
The country does not have
‘Make in India’, Atmanirbhar
The electronics industry is
three major incentive
incremental demand would be
enough presence in the
The Scheme for Promotion of
Bharat, Digital India and Smart
classified into six broad
met through a rise in imports.
schemes in 2020 to support
Further, MeitY’s recent EOI
Manufacturing of Electronics
indigenous manufacturing of
City initiatives, the electronics
segments viz. communication
for inviting companies to set
local manufacturing. These
It also needs to be noted that
high value components such
Components and
industry has made noteworthy
and broadcast equipment
up semiconductor and display
the country specializes in low
include the Production Linked
Semiconductors (SPECS),
as semiconductors which are
progress in terms of production
(including mobile phones),
Incentive Scheme (PLI),
tech content and most
fabs is a welcome step and
which targets the
extensively used by the
and growth in the last five years.
consumer electronics,
should be pursued further.
high-tech components are
Scheme for Promotion of
electronics industry. For
development of the
This is borne out from the fact
industrial electronics,
B. Deepening the supported CAS (conditional Introduction electronic components, that the value of production in presently imported. This is Manufacturing of Electronic components’ ecosystem, is which restrict the potential example, the country
Component Value Chain access system) for set top
across the entire boxes.
ecosystem
Similarly, a global innovation
The domestic electronics challenge for designing of
industry is characterised by semiconductors and chip sets
lack of a component for educational tablets for the The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the
ecosystem which leads to its masses could be encouraged. development of India, partnering Industry, Government, and civil society through working closely with
dependence on imports. High Government on policy issues, interfacing with thought leaders, and enhancing efficiency, competitiveness
dependency on imported Besides, the next focus should and business opportunities for Industry.
inputs raises cost and impedes be on maximizing domestic For more than 125 years, CII has been engaged in shaping India’s development journey and works
competitiveness. A right mix value addition and promoting proactively on transforming Indian Industry’s engagement in national development. The premier business
of policy realignment coupled Design in India, besides Make association has over 9000 members, from the private as well as public sectors, and an indirect membership
with new targets is required. in India. For this, the of over 300,000 enterprises from around 294 national and regional sectoral industry bodies.
know-how available with
The government has, no doubt Government owned R&D With 62 offices, including 10 Centres of Excellence in India, and 8 overseas offices in Australia, Egypt,
Germany, Indonesia, Singapore, UAE, UK, and USA, as well as institutional partnerships with 394
announced the PLI scheme for laboratories should be made counterpart organizations in 133 countries, CII serves as a reference point for Indian Industry and the
components. However, the 5-6 freely accessible to industry, international business community.
per cent incentive on outsourced R&D needs to be
incremental sales, envisaged incentivized on the lines of
under the scheme, is not In-house R&D, Technology
enough to achieve scale in this Acquisition Fund be created
sector and accordingly would for liberal assistance in filing
discourage manufacturers patents and a Guarantee Fund
from indigenizing production. be created to help R&D
Hence, the government should houses to raise working
review the scheme by capital.
expanding the incentive from
the present 5-6 per cent and D. Other Suggestions CII Research is an Industry think-tank providing thought leadership on strategic economic and industry
widen the eligibility criteria. A issues critical to national growth and development. Drawing on a deep reservoir of industry leaders and
revamped PLI would facilitate Similarly, the government industry associations spanning all sectors and present across the country, CII Research originates
scale economies from should also look at other analytical reports in consultation with stakeholders. Based on strategic perceptions and data, these
domestic production and also options such as leveraging in-depth insights suggest specific policies and action plans that would enhance the role of Indian industry
in nation-building.
encourage SMEs to strengthen upcoming FTAs (UK & the
the supply chain and reduce EU) towards enhancing
our dependence on imports. exports, incentivizing Confederation of Indian Industry
manufacture of products not The Mantosh Sondhi Centre, 23, Institutional Area, Lodi Road, New Delhi – 110 003 (India)
C. Encouraging Design-led currently produced in India, T: 91 11 45771000 / 24629994-7 • E: info@cii.in • W: www.cii.in
Manufacturing facilitating EoDB, among
others.
For ensuring that the industry cii.in/fecebook cii.in/twitter cii.in/linkedin cii.in/youtube
remains competitive (by To conclude, a robust policy
facilitating domestic IP environment would help the
creation), even after the PLI & country to realise the huge Reach us via our Membership Helpline Number: 00-91-99104 46244
other benefits expire, a push opportunity awaiting India to CII Helpline Toll Free Number: 1800-103-1244
to R&D is most essential. For emerge as a global hub for
this, the government should electronics and meet the
explore innovative solutions targets envisioned in the NPE
for the sector such as a model 2019.
based on the Government led
domestic manufacturers