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ISA identifies opportunities for India

Posted: 06 Jan 2010     Print Version  Bookmark and Share

Keywords:ISA  opportunities  India  domestic electronics demand  electronics exports 

Poornima Shenoy

Shenoy: The electronics industry has a high potential for domestic value addition.

With India among the few economies that survived the full brunt of the recession last year, Vivek Nanda, EE Times India, asked Poornima Shenoy, president, India Semiconductor Association (ISA), to talk about the year ahead, challenges and new opportunities.

The ISA represents about 120 members from India and overseas in promoting India as the preferred destination for semiconductor companies, including chip design and embedded software services, solar fabs and the related ecosystem.

The ISA worked with the Indian government in the formation of the Indian Semiconductor Policy 2007. Overseas, the organisation signed an agreement September 2007 with the Taiwan Semiconductor Industry Association (TSIA) to promote and attend international trade events, assist trade delegations and encourage business relationships among members.

Domestic demand for electronics

Chart 1: ISA projects domestic electronics demand based on industry estimates.

EE Times India: How is India's electronics industry expected to perform in 2009?
As per industry estimates, the domestic production of electronics in India has grown at 16 per cent annually over the FY04-09 period to reach revenues of Rs.93,644.46 crore ($20 billion). A significant portion of domestic production is consumed in the Indian market and only a small portion of the production is exported. Exports of electronics stood at Rs.20,601.78 crore ($4.4 billion) for FY09, representing 21 per cent of domestic production. Exports have grown at 19.5 per cent annually for the FY04-09 period. (See charts 1 and 2.)

What are the major challenges and opportunities facing India?
The electronics industry in India is at cusp of a large and growing opportunity. There have been some missed opportunities in the past decade. So, while the future holds a lot of promise, we need to address some existing challenges in infrastructure, taxation, supply chain and logistics, labour laws, R&D and funding.

Electronics exports

Chart 2: ISA projects India's electronics export growth based on industry estimates.

Supply is not keeping pace with demand and hence there are ever increasing imports into the country from China and Taiwan. Local manufacturers cannot match competitive prices of imported finished goods due to the challenges (see table 1).

In terms of opportunities, the electronics industry can make an important contribution to the GDP, employment generation, modernisation and inclusive growth of the country. The industry has a high potential for domestic value addition, particularly segments like semiconductor design and electronic system/product design.

How should India address these challenges and opportunities? What is the ISA doing to help?
The Ministry of Communications & Information Technology has recently set up a high powered task force to look into the issues facing the IT and the electronics industry. The agenda of the task force is to come up with very specific actionable recommendations for the medium and long term.

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