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2012: Interesting year for Indian electronics industry

Posted: 09 Jan 2012     Print Version  Bookmark and Share

Keywords:National Policy on electronics  ESDM  ESM  semiconductor 

2012 promises to be an interesting year, with both exciting and worrying events anticipated. While on the one hand the global economic climate is volatile and can cause some slowdown in the country's economic growth, on the other the National Policy on Electronics promises far-reaching consequences for every Indian.

National Policy on Electronics
By far the most exciting event on the horizon for the Indian semiconductor and electronics ecosystems is the National Policy on Electronics which is expected to be formalized in 2012. The Policy aims at addressing the huge gap—estimated at Rs.15.31 lakh crore ($300 billion)—between locally manufactured electronics and the consumer demand for electronics that we expect to see by 2020. If immediate steps are not taken to address this gap, it is forecasted that by 2020, electronics imports may far exceed oil imports. The Policy takes a holistic view of developing the Electronics System Design and Manufacturing (ESDM) ecosystem with a view to bridging the demand-supply gap. Its provisions are wide ranging and cover diverse areas such as manufacturing, R&D, IP creation, manpower and training, standards, e-waste management, investments, and the setting up of a National Electronics Mission.


Ahuja: Once the ESM ecosystem is established, defining, creating and designing products for India is the natural next step.

Developing an ESM Ecosystem
Once the Policy is finalized and passed in Parliament, the need is to move aggressively towards implementation. This will play out with the systems manufacturing ecosystem (ESM) developing first—ESM is the back-bone infrastructure for manufacturing the final product and it helps to be close to the end consumer.

Once the ESM ecosystem is established, defining, creating and designing products for India is the natural next step. While this can happen in parallel with the development of local ESM, it requires some maturity in terms of investment, understanding of market needs, product definition and architecture, and the ability to connect with the rest of the ecosystem. This knowledge and experience will be gained through the development of systems manufacturing.

The development and maturity of ESM will naturally create a pull-through for the rest of the ecosystem, including components manufacturing and the semiconductor fab that has been proposed. The local demand for semiconductors will finally justify the setting up of local wafer fab facilities.

Already we have seen a few examples of the far-reaching effects of local ESDM in enabling national priorities—the Akaash tablet is a powerful example of a product co-designed and manufactured in India which, apart from changing the lives of hundreds of millions of school children, can have global impact. Nano Ganesh—which allows farmers to use mobile phones to remotely monitor and switch on irrigation pumps in remote locations—has the power to alter the lives of farmers, if scaled up adequately.

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