 "Electronics sector ends 2013 on high with Rs 62,000 cr investment proposals")
New Delhi: With investment proposals of over Rs 62,000 crore featuring during 2013, the performance of electronic sector overtook that of telecom, once a top notch segment of Indian economy.
Though the largest chunk of investment of about Rs 51,550 crore was approved during the year and is yet to close, about 20 entities separately proposed to invest about Rs 12,000 crore in Indian electronics manufacturing sector which is highly dominated by imports.
In absence of corrective measures, it is estimated India will be importing electronics products worth about USD 300 billion, which will be more than the value of the country’s imports of petroleum products.
[caption id=“attachment_960481” align=“alignleft” width=“380”]  Telecom and IT Minister Kapil Sibal. PTI[/caption]
“The present import bill of crude oil is about USD 140 billion. Do you think Indian economy can afford to import USD 300 billion of consumer electronics. We will become bankrupt. We have no choice than to build manufacturing sector in our country,” Telecom and IT Minister Kapil Sibal said.
The Indian electronics sector during the year came up from ventilator after government gave it a booster dose of first ever policy framework in 2013- National Policy on Electronics.
Impact Shorts
More Shorts“I would say both 2012 and 2013 should be seen together as foundation year of electronic system and design manufacturing sector. National Policy of Electronics was approved this year but some of the key elements were approved in 2012,” Department of Electronics and IT’s Secretary J Satyanarayana said.
After successfully putting in place policy framework required for hardware manufacturing, DEITY has started working on second stage of electronics sector development.
This would involve streamlining processes in terms of taxations, ease of business and creation of intellectual property rights.
“Demand of electronics product domestically is expected to grow to USD 400 billion by 2020. We have seen huge interest for investment in electronics sector. This is just a beginning. Now we have to work for second level of policy intervention which related to streamlining business process, approvals and taxations,” DEITY Joint Secretary Ajay Kumar said.
One of the significant steps in this direction was a hike in import duty on set-top boxes from 5 percent to 10 percent. This enabled domestic set-top box makers looking at a turnover of about Rs 4,500 crore in the financial year by capturing 50 percent market share and creating employment for about 12,000 people.
Foreign STB makers almost wiped out domestic players during phase I and II of cable TV digitalisation with around 95 market share.
Flat panel Television makers reaped benefit of one such decision when government imposed 36 percent import duty on flat panel TVs starting August that were brought into India aspart of baggage by passengers from abroad, the source added.
As per industry body Consumer Electronics and Appliances Manufacturers Association, about 1 million flat panel TVs were coming in as accompanied baggage in a year, which constitutesabout 20 percent of the total market size of the country.
The production of flat panel TV in the country has grown by about 39 percent in September and 20 percent in October on year-on-year basis.
India made a significant decision by approving two semi-conductor plants or electronic chip manufacturing units in the country which can be seen as a step towards an independence inthe high technology world.
Two consortia – one led by Jaiprakash Associates in association with IBM and the other by Hindustan Semiconductor (HSMC) – have proposed setting up of these plants.
For HSMC Founder and Chairman Deven Verma, Cabinet approval to set up semiconductor plant was an “emotional connect” as he says almost all chipsets created in the world pass through Indians but this critical component with security implications is not made in the country.
“There are security implications of technology. Every major country in the world is pushing to attract technology leaders for hi-tech product development. But we came here on our own, not just for pure commercial reason alone but because we are emotionally attached to India,” Verma said.
The country has earlier missed chance to have Intel like company in 1960s when founder of computer chip giant Intel Robert Noyce had approached the government in 1960s to set up semiconductor plant in the country but bureaucrats at that time did not favour allowing him to export the quantity of chips he was looking for.
Chips now play a crucial role in the era of cyber security when there are threats of cyber espionage and malwares that can give control of even modern war weapons in the hand of foreign players.
The sector had a bumpy ride when Prime Minister’s office asked for revising Preferential Market Access policy (PMA), which calls for domestic sourcing of technology products thatcan have security implications.
The Cabinet this month approved the revised policy with changes as suggested by the PMO.
DEITY is now working on new guidelines to promote innovation in the sector and create IPRs which is important for both strategic and economic reason.
“If we go on paying for IPRs that is not the model which has to be emulated. In an electronic product or any telecom product, more than 40 percent in dollar terms will go in to IPRs. In any smartphone, IPRs take away good percentage that means design of chip and various components and putting it together,” Satyanarayana said.
The government has envisaged a Rs 10,000 crore electronic development fund (EDF) but the fund has not seen light of the day yet.
DEITY Secretary said that there is ongoing correspondence for EDF with concerned departments and he is hopeful of getting approval on it soon.
“Recently cabinet has approved innovation fund for Rs 5,000 crore for MSME Ministry to create innovative entrepreneurs. There is already steps taken in the direction of promoting innovation. It becomes easier for us on the electronic side to take lead from them,” Satyanarayana said.
The National Policy on Electronics aims to create 28 million new jobs and for which it needs to train people.
DEITY secretary said the government is yet to make a beginning in area of human resource development in the sector.
PTI
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
](https://images.firstpost.com/wp-content/uploads/2013/07/kapil-sibalFDIPTI.jpg){kind=link}