1. |
Electronics Industry reported at USD 1.75 Trillion is the |
this field. |
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largest and fastest growing manufacturing industry in the |
3. |
Electronics is characterized by high velocity of |
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world. It is expected to reach USD 2.4 Trillion by 2020. The |
technological change. Consequently the life cycle of |
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demand in the Indian market was USD 45 Billion in 2008- |
products is declining. As a result, the value of design and |
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09 and is expected to reach USD 400 Billion by 2020. |
development in the product has increased quite |
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Domestic demand is expected to be driven by growth in |
significantly, Given India ' s growing strength in chip design |
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income levels leading to higher off-take of electronics |
and embedded software, the increasing importance of |
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products, automation demands of corporate sector and the |
design in product development has potential to make India |
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government ' s focus on e-governance. The domestic |
a favoured destination for ESDM. |
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production in 2008-09 was about USD 20 Billion. However, the actual value-addition in the domestically produced electronic product is very low, ranging between 5 to 10 percent in most cases. At the current rate of growth, the domestic production can cater to a demand of USD 100
Billion in 2020 as against a demand of USD 400 Billion and the rest would have to be met by imports. This aggregates to a demand supply gap of nearly USD 300 Billion by 2020.
Unless the situation is corrected, it is likely that by 2020, the electronics import may far exceed oil imports. This fact goes unnoticed because electronics, as a " meta resource " forms a significant part of all machines and equipment imported, which are classified in their final sectoral forms, for example, automobiles, aviation, health equipment, media and broadcasting, defence armaments, etc. It is also pertinent to note that Indian electronics hardware production constitutes only around 1.31 % of the global production. On the other hand, the share of global electronic equipment production of the largest contributing nation has increased from 17 % in 2004 to 33 % in 2009.
Conversely, the country ' s imports are expected to rise from
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4.
5.
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ESDM is of strategic importance as well. Not only in internal security and defence, the pervasive deployment of electronics in civilian domains such as telecom, power, railways, civil aviation, etc. can have serious consequences of disruption of service. This renders tremendous strategic importance to the sector. We cannot be totally dependent on imported electronic components and products for such a sector.
The electronic components, which are basis of an electronic product, are low volume-low weight, cheap and easy to transport across the globe. Moreover, under
Information Technology Agreement-1( ITA-1) of the World
Trade Organization, which came into force in 1997, a large number of electronic components and products are bound with zero tariffs making trade unrestricted across international borders. Also, the electronics manufacturing is characterized by high volume and low margins. All these have resulted in the electronics hardware industry being globally integrated with few large global players catering to a large part of the world.
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50 % to 75 % even as demand is rocketing. |
6. |
Recent trends show that an increasing number of |
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2. |
India is a recognised global player in software and software services sector. It lags behind in electronics hardware manufacturing capabilities, though it is increasingly becoming a destination for chip design and embedded software. The vision is to transform India into a global hub for electronics system design and manufacturing( ESDM) so as to meet the growing domestic and global demand. |
engineering and design activities are also being outsourced to Electronic Manufacturing Services( EMS) companies.
These companies are becoming Original Design
Manufacturers( ODMs) and also provide final system integration and logistical support. It is important to focus on increasing the footprint and the size of the EMS companies in the country.
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There are many challenges to advance the same – |
7. |
India is one of the fastest growing markets of electronics in |
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infrastructure gap, tax structure, supply chain and logistics, |
the world. There is potential to develop the ESDM sector to |
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inflexible labour laws, limited R & D focus, inadequate |
meet our domestic demand as well as to use the |
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funding and limited value addition. Recognising the |
capabilities so created to successfully exports ESDM |
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importance and potential of the Electronics Sector, several |
products from the country. The National Policy on |
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economies in the Asia-Pacific region have repositioned |
Electronics aims to address the issue with the explicit goal |
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themselves through infrastructural investments and proactive policies to emerge as a global power-house in |
of transforming. |
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