Big opportunity for ‘Electronic System Design & Mfg Cos as India’s demand for electronics hardware expected to reach USD 400 bn by 2020

Big opportunity for ‘Electronic System Design & Mfg Cos as India’s demand for electronics hardware expected to reach USD 400 bn by 2020

A big opportunity lies ahead for companies engaged in the Electronic System Design & Manufacturing (ESDM) as the demand for electronics hardware in India is expected to increase from USD 45 billion in 2009 to USD400 billion by 2020.

According to a recent ‘Task Force Report’, prepared under the aegis of Ministry of Electronics and Information Technology (MeiY), the estimated production will reach USD 104 billion by the year 2020, creating a gap of a whopping USD 296 billion in demand and production. Thus this huge gap throws an ample opportunity for companies in the ESDM (Electronic System Design & Manufacturing) sector to look at India as their next destination to cater to the growing market in India.

Some of the areas highlighted in the report include: electronic hardware products relating to IT and office automation, telecom, consumer electronics, electronic components, and wide range of products relating to verticals like solar photovoltaic, automotive electronics, medical electronics, avionics, LED, etc.

The report says that while demand increased across all sectors, demand for high technology products, specifically electronic products has registered significant growth. Accordingly, the Government of India has initiated several initiatives for the development of electronics sector in the country.

The Government has recently approved National Policy on Electronics (NPE). One of the important objectives of the NPE is to achieve a turnover of about USD 400 Billion by 2020 involving investment of about USD 100 Billion and employment to around 28 million by 2020, which includes achieving a turnover of USD 55 Billion of chip design and embedded software industry, and also USD 80 Billion of ambitious exports target, as projected by in the Task Force Report.

Reportedly, the Government also proposes to set up of over 200 Electronic Manufacturing Clusters, in addition to increasing high-end human resource creation to 2500 PhDs annually by 2020 in the sector.

It is reported that India is generating nearly USD 2 Billion in revenues per annum from the chip design services. Thus the Government has further plans to boost the electronics sector by setting up a semiconductor Wafer Fab as the India has become the hub for semiconductor design with nearly 2000 chips being designed per year and more than 20, 000 engineers are working in various aspects of chip design and verification.

Other policy initiatives approved by the Government include:

*Providing attractive financial investment in electronics manufacturing

*Providing preference to domestically manufactured electronic goods in all Government procurement as well as all those electronic goods whose use has security implications for the country.

* Financial incentives given not only to new units but also to units relocating from abroad.

*To address the issue of infrastructure, a scheme for Electronics Manufacturing Cluster provides 50% of the cost of upgrading infrastructure and logistics as grant in aid from Government.

* Since India has a large pool of innovative and talented human resource, with over 200,000 engineers created every year. So, the Government also proposes to enhance the number of post graduates and PhDs in Electronics so that abundant manpower is available for Electronics industry to grow further.

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