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Govt eyes setting up 300 manufacturing hubs

The government unveils the draft National Policy on Electronics, 2011 setting an ambitious turnover target of $400 billion by 2020 for the electronics goods industry.

Kapil Sibal, Union minister for communications & IT Kapil Sibal, Union minister for communications & IT
The government on Monday unveiled the draft National Policy on Electronics, 2011 setting an ambitious turnover target of $400 billion by 2020 for the electronics goods industry . It also aims to set up over 200 manufacturing hubs across the country.

To achieve the new turnover target, which is a 20-fold jump in production of $20 billion in 2009, the sector will require an investment of about $100 billion. This in turn, is expected to generate 28 million new jobs in the sector by 2020.

According to the draft document, the demand in the Indian market was $45 billion in 2008-09 and is expected to reach $400 billion by 2020. At the current rate of growth, the domestic production can cater to a demand of just $100 billion and the rest would have to be met by imports.

"This aggregates to a demandsupply gap of nearly $300 billion by 2020. Unless the situation is corrected, it is likely that by 2020 the electronics import may far exceed oil imports," minister for communications and information technology Kapil Sibal said while releasing the draft. Of the total $400 billion production target, the policy also envisages achieving a turnover of $55 billion in chip design and embedded software and $80 billion of exports in the sector.

"Of the three sectors - IT, telecommunications and electronics - electronics presents special challenges. The draft policy seeks to address the major barriers which include lack of a strong base, an adverse international environment and failure to build an enabling ecosystem," Sibal added.

"The proposed National Policy on Electronics, 2011 envisions creating a globally competitive electronics manufacturing industry, including nano electronics to meet the country's needs and serve the international market," Sibal said.

For the proposed 200 electronics hubs, Sibal said he is already in talks with chief ministers of different states to find places to set up such clusters. Another important objective of the policy is to augment postgraduate education and to produce about 2,500 PhDs annually by 2020.

"For this we need tie-ups with universities and educational institutions like IITs and IIScs," Sibal added. The final policy on electronics is expected by December. "We expect to receive comments on the draft by November," he said. The draft also proposes to set up a National Electronics Mission with industry participation for achieving the objectives enumerated in this policy and to promote India as an electronics hardware manufacturing hub.

As part of the strategy to achieve this target, the draft proposes attractive fiscal incentives across the value chain of the Electronics Systems and Design Manufacturing (ESDM) sector and providing preferential market access for domestically manufactured electronic products, including mobile devices and SIM cards with enhanced features.

The draft also talks of creating an 'electronic development fund' for promoting innovation, research and development and commercialisation in ESDM, nano electronics and IT sectors, including providing support for seed capital, venture capital and growth stages of manufacturing. The government has also proposed to rename the department of information technology as the department of electronics and information technology (DeitY).

Courtesy: Mail Today