India As Global Hub For Electronics Manufacturing

Webinar Background and Issues

The Department for Promotion of Industry and Internal Trade (DPIIT) has identified electronic as among the 24 key areas under Aatmanirbhar Bharat.

The Indian electronics sector has the 2nd largest import bill, behind oil, with a whopping $58 billion worth of imports in 2019. As 1/6th of the world’s population, India is one of the largest markets in terms of electronics consumption. The projection for the Indian electronic sector is to be worth $1 trillion. With digital transactions up by 10x, we know that a new digital era is being ushered in. Hence it becomes imperative to build a vibrant electronics ecosystem in central in achieving a positive import bill.

As many global players move to decentralize their supply chains, India has a great opportunity to become a global hub of electronic manufacturing.

Webinar Objectives

  1. Representatives from the policy establishment to highlight the policy measures and challenges in Atmanirbhar In Global Electronic Manufacturing
  2. Respond to question on Industry concerns/improvement opportunities on policy steps.
  3. Perspective on 0perationalising the electronic manufacturing policy at state level.

Webinar Format

Session 1 – Key Note Address by Ravi Shankar Prasad on Atmanirbhar Bharat: Achieving The Vision Of India As Global Manufcturing Hub (10 minutes)

Session 2- Q&A With  Ravi Shankar Prasad On ‘Atmanirbhar Bharat: Achieving The Vision Of India As Global Manufacturing Hub’ (25 minutes)

Session 3- Panel Discussion On “Policy Enablement And Environment On India As Global Manufacturing Hub’ featuring Atul Bisht (Invest India) And Dr. Aswath Narayan (Dy CM, Karnataka) 30 minutes

Webinar -Key Coverage Areas

  1. New national electronics policy proposes to build on the progress of last 5 years: CAGR of 23% in mobile market, CAGR of 38% in mobile exports, and the upwards trends are expected to continue. Another promising trend is the drop in imports of finished electronics products. How do we sustain this momentum?
  2. Make In India - In order to position India as a global hub for Electronics System Design and Manufacturing (ESDM), the Production Linked Incentive Scheme (PLI), Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters Scheme (EMC 2.0) have been launched  Some of concerns on policy to be highlighted
  1. Under the PLI scheme, there are not only five-year investment and sales targets that the eligible companies will have to meet but there are annual targets as well. Can setting a ceiling (which runs into thousands of crores for sales) can be an impediment for companies to commit to making in India under this scheme?
  2. Rs 41,000 crore outlay for PLI is impressive but for the other two schemes — SPECS and EMC 2.0, it’s comparatively really low (Rs 3,000 crore+). It takes upwards of Rs 10,000 crore to set up a full-fledged fab (semiconductor fabrication plant). Under SPECS, that means reimbursement of around Rs 2,500 crore (25 per cent of capex). And since there is no upper limit for reimbursement under SPECS, what if a lot of companies make a beeline to invest large sums? In that case, is the outlay sufficient.
  3. Under SPECS, the government has put a cap of 20 per cent for reimbursement of refurbished items. This is surprising given that in semiconductor industries, refurbished items are not waste and they can potentially lower the cost of production by a third. Shouldn’t that limit of 20 per cent be raised, at least for companies which will invest huge amounts?
  1. Design in India: Should we or should we not create fabs in India? In trying to answer this question, we have lost 10 years or more. Now, the geopolitical situation has dramatically changed. It is no longer a question of “should we or should we not” but “what to do, how to do and when to do”. India, with its electronics-import bill ballooning to $55 billion and facing a security threat if any of the chips used in the product are designed in China, needs to cover lost ground fast.
  2. Skilling Challenges: One of the major impediments to electronics manufacturing in India is lack of skilled workforce amidst rapidly changing world of technology. Plans to rope in HRD and Skills Ministry to solve those issues
  3. Kickstarting Electronic Manufacturing in North And East States: The unprecedented migrant exodus from big metros during the Covid-19 crisis has again highlighted the grave issue of development gaps between the Eastern India and West/South India. Electronics manufacturing is a great opportunity to create 1.5-2 million jobs in a very short period in states like UP, Bihar, West Bengal, etc. These states also have good water availability which the Fab industry needs. Power situation has improved immensely too in recent times.
  4. Electronic Manufacturing Beyond Mobiles: Strategy for high volume products like TVs and set-top boxes in consumer electronics, and also incentive schemes for $360-billion global market for desktops, laptops, servers and datacom products.
  5. State Level Interventions To Boost Electronic Policy