Long term policy focus for leveraging Manufacturing Strengths in Electronics

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With a view to encourage electronic units to make in India, the government is contemplating a three pronged approach which would help the sector ascend on the accelerated path of promoting growth in this sector. The first prong entails a shift towards a long term policy horizon so that the policy path is known and the end user has clarity in what is in store for the industry.  Secondly, the taxation regime is being made stable, which entails putting in place a grandfathering clause to bring clarity to the system and thirdly all support schemes are being put in place to help us leapfrog to higher echelons of growth. This was stated by Dr Aruna Sharma, Secretary, DeitY, during the Conference on Championing Manufacturing in India, in the session on  ICTE , organised by CII.

According to Dr. Sharma, while electronics manufacturing has an advantage of a large consumer base, we have fallen behind while developing a competitive advantage in the production of components, which remains a challenge. The government is planning to address the challenge by looking into the differential tax system across the sector, promoting innovation and research, and building local capacity for components production.

Commenting on the three specific segments viz mobile, LED and PCB, Dr Sharma mentioned that at a time when our country has an advantage in low end manufacturing, the government is promoting the segment by hastening a shift towards smart phones. India is keen on leveraging the analogue technology, in which we have a comparative advantage, to create a global footprint in the area of electronics. Similarly, all concessions would be provided for the development of the PCB and LED industry. Medical and Automotive electronics are other focus areas with growing opportunities for which significant research is happening at IITs, said Dr Sharma.

The differential taxation between units operating within and outside SEZs would be abolished and equal treatment would be provided across units so that there is no perceived advantage for companies operating in SEZs, stated Dr. Sharma.

Dr. Sharma requested CII for draft policy papers on the three major segments of electronics viz   Mobile, LED and PCB so that government and industry could work together for a comprehensive policy on the subject.

During the Panel Discussion, Mr Amit Kharbanda, Managing Director, MyBox-Hero Electronix Venture mentioned that it would be possible for the electronics industry to augment the requisite volume in production provided the government addresses industry concerns on distortions accruing from FTAs especially with ASEAN countries and creating an integrated ecosystem for electronics industry for which the criticality of R&D needs to acknowledged.

According to Mr. Vinod Sharma, Managing Director, Deki Electronics Ltd, the electronics industry has a promising future provided the problems characterized by 3Cs are addressed. These pertain to high cost of operation eg. finance, energy, logistics; complex and discretion based policy regime which leads to high transaction costs and corruption.

Mr Ramesh A Vaswani, Director & Advisor Corporate Affairs, Intex Technologies stressed on the need for a comprehensive policy to promote holistic growth of the industry. He called for integrated policy so that it becomes logistically convenient for labour to stay close to the unit. This would entail facilities such as residence, food, transport etc. There is need to identify electronic manufacturing clusters and provide the supporting ecosystem; secondly, there is need for a legislation so that every school child has the right to internet.  Subsidy should be provided to access broadband on smart phone so that rural citizen can take advantage of the net and thirdly, create supportive policies to benefit domestic manufacturing.

Mr Amrit Manwani, Chairman, Sahasra Group of Companies, while highlighting the potential of the sector underscored the importance of encouraging domestic manufacture of LED packaging in the country and promotion of alternate indigenous technologies in electronics which are environmentally friendly .  There is also a need for creation of PCB specific clusters and develop production technology in India through research to move up the technology value chain.

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