The Centre is putting together a proposal to promote electronic manufacturing clusters as part of its modified Special Incentive Package Scheme (SIPS) meant to incentivise hi-tech manufacturing ? a move that reflects growing concerns in government circles about the rising import bills of electronics.
China and Taiwan have raced far ahead in technology hardware manufacturing and eyebrows are being raised on India’s reliance on other countries for high-end electronic components. Some industry watchers estimate the current gap between the domestic electronic market and the local production at a stupendous $23-25 billion.
Electronic manufacturing clusters (EMCs), sources said, would create an ecosystem required to set up units for the manufacture of electronic products, semiconductor wafers, chips and its components, electromechanical components and mechanical parts of electronics among others. An EMC would comprise housing, hostels, education and healthcare facilities for employees, uninterrupted power, banking facilities and would be located close to airports and sea ports.
SIPS, part of the government?s Semiconductor Policy announced in September 2007, expired on March 31 last year. It was mainly targeted at promoting semiconductor and ancillary industries. The department of information technology is now readying a modified version of the scheme that will be available to a wider ecosystem and can be open for 10 years, sources said.
EMCs will be a major change in the policy ? India has no such cluster thus far to promote high-tech investments. Taiwan?s most popular cluster, the Hsinchu Science Park, has become a nerve centre for semiconductor manufacturing and has over 400 companies. China has been promoting its technology cluster, the Suzhou Industrial Park, since 1994.
EMCs will be provided subsidies, modalities of which are being worked out. It could be set up directly by either the central or the state government, through joint ventures and PPP models. Existing manufacturing clusters will be given an option to get converted under the new scheme, sources added.
Hardware industry bodies such as the India Semiconductor Association (ISA), the Electronic Industries Association of India (ELCINA ), the Telecom Equipment Manufacturer’s Association (TEMA), the Manufacturer?s Association of IT Industry (MAIT), the and the Consumer Electronics and Appliances Manufacturers Association (CEAMA) have been long pressing the government to take a cluster approach.
When approached, Poornima Shenoy, president of ISA said that electronic hardware clusters have been successful in the Far East. ?They bring in synergies of component manufacturers, save time and costs for assembly and packaging and improve competitiveness between companies with same focus. By enabling bureaucracy they expedite the processes of land acquisition and other procedures for utilities. The availability of skilled manpower and access to specialized services, suppliers and vendors adds to the attractiveness of the cluster,? she noted.
Rajoo Goel of ELCINA, India’s oldest Electronics Association promoting manufacturing, said high-tech manufacturing requires a more organised plug and play infrastructure. ?Besides economic benefits, high-tech manufacturing is strategic as well. Everything today is driven by electronics and if we don?t invest in manufacturing, we will become more reliant on foreign technology,? he said.