Cabinet today approved the National Policy on Electronics 2012 that will encourage the creation of manufacturing and research of electronic components in India. With this move India will try to rival China, which is currently the hub for electronics manufacturing in the world.
The policy will strengthen Electronic System and Design and Manufacturing (ESDM) sector in the country to create a turnover of $400 billion while creating 2 million jobs. The strategies include setting up of a National Electronics Mission with industry participation and renaming the Department of Information Technology as Department of Electronics and Information Technology (Deity). The Department has since been renamed on February 26, 2012.
Having an indigenous manufacturing eco-system in the country will complement India’s strength as an R&D hub. Apart from supporting private companies, the government hopes that the policy will also help the defence, telecom and railway sectors that are currently dependent on foreign companies for these assets.
One of the aims of the policy is to build on the emerging chip design and embedded software industry to achieve a turnover of $55 billion by 2020. There is also a strategy to build a strong supply chain of raw materials, parts and electronic components to raise the indigenous availability of these inputs from the present 20-25 per cent to over 60 per cent by 2020. The availability of these raw materials is one of the strengths of manufacturing sector in China and if the Indian government can pull it off, it can move beyond the service sector and diversify its strengths.
As of now exports by India in the ESDM sector stands at $5.5 billion and the goal is to increase it to $80 billion by 2020.
Yet another goal of the policy is to make India a global leader in creating Intellectual Property (IP) in the ESDM sector by increasing fund flow for R&D, seed capital and venture capital for start-ups in the ESDM and nanoelectronics sectors. The government will also try to make India a global leader in the Electronic Manufacturing Services (EMS) segment by promoting progressive higher value addition in manufacturing and product development.
Also included in the policy is a suggestion to improve the handling of e-waste in the country. The strategy includes various initiatives to facilitate environment friendly e-waste handling policies.
The Electronics industry reported at $1.75 trillion is the largest and fastest growing manufacturing industry in the world. It is expected to reach $2.4 trillion by 2020. The demand in the Indian market was $45 billion in 2008-09 and is expected to reach $400 billion by 2020.