In August last, the Department of Information Technology (DIT), Ministry of Communications & IT, and the Indian Government formed a task force that will suggest measures to undertake to stimulate the country’s information technology (IT), IT-enabled services (ITES), and electronics systems design and manufacturing industry amid the significant challenges brought about by the global economic crisis.
The task force provided several recommendations for the three sub-sectors of India’s electronics and IT industry. For the electronics systems design and manufacturing segment, the task force recommended the establishment of a National Electronics Mission, which will be a nodal agency for the electronics industry within the DIT, which aims to help synchronize the functioning of the industry through effective coordination across ministries and government departments in the centers and the states.
The report also mentioned that supply is not keeping pace with domestic demand, resulting in ever-increasing imports from China, Taiwan, and South Korea. In fact, the current demand for electronics in India, valued at $45 billion, is projected to grow to $125 billion by 2014 and to $400 billion by 2020. That is why one key recommendation is that the government’s long-term vision should augment the growth of domestic electronics manufacturing by focusing especially on this sector. Another step should be the nurturing of established electronics manufacturing clusters, and developing them into centers of excellence, while encouraging the forming of new ones.
Another key recommendation cited in the report is on the segment called “strategic electronics”, which includes the focus on technology areas that need to be developed domestically because they are unlikely to be transferred by global players. This includes supplying hardware, software and services to the aerospace, defense and nuclear markets, locally and globally, wherein exists a huge opportunity yet to be tapped as these markets have been largely catered to by government agencies.
India’s electronics industry is poised for high growth; but until multiple challenges, such as inadequate infrastructure, supply chain/logistics issues, inflexible labor laws, limited R&D focus, among others, will be addressed, progress will be slow. This year, India should focus on meeting these challenges and gear up to realize its huge potential.
