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Electronics Policy: Industry Speaks

Posted: 16 Jul 2012     Print Version  Bookmark and Share

Keywords:electronics policy  electronic system design and manufacturing  modified special incentive package  fabs  semiconductor chips 

The Cabinet approves a Rs.10,000 crore package to promote large-scale manufacturing in the electronic system design and manufacturing sector as well as create 5 lakh jobs over the next five years. The scheme, called the modified special incentive package scheme (M-SIPS), would also provide incentives for relocation of units from abroad to woo foreign firms.

What the industry feels?

PVG Menon, president, India Semiconductor Association (ISA): ISA broadly welcomes the announcement of the notification of the modified special incentive package scheme (M-SIPS) by the government today.

Together with the approval of the scheme for support for dedicated Electronic Manufacturing Clusters (EMCs), the M-SIPS will go a long way in developing the support eco-system for domestic manufacturing of electronics products.

Domestic companies face severe disability in manufacturing electronics systems in India. This prevents them from being able to compete with imports. The support being envisaged for domestic manufacturers of electronics under the M-SIPS and EMC policies will undoubtedly provide a much needed helpline for domestic players. The setting of specific threshold limits for individual product categories, and broad-basing of these categories, will also help bring much needed clarity and focus to the Modified SIPS.

ISA also calls upon the government to hasten the decision making process on the Electronic Development Fund and hopes to see a significant allocation being made towards creation of the EDF at the earliest. We believe this is vital for promoting innovation and creation of IP within India, thereby giving a much needed boost for creation of world-class indigenous electronics products out of India.

Arun Mulpur, manager, industry marketing—communications, electronics, and semiconductors, MathWorks Inc.: According to the Indian Government's Department of Information Technology, India's demand for electronics was $45 billion in 2008-09 and is expected to reach $400 billion by 2020. In order to earn a slice of this market, electronics companies must design and market their products specifically with the Indian consumers in mind.

Global automakers have shown that the best way to win in a regional market is to design and produce right there in that region. This bodes well for the electronics and communications system design engineers in India. In the next decade, electronics companies must substantially increase their engineering, production, and assembly footprints in India in order to be locally relevant and to compete and grow.

Therefore, the National Policy on Electronics is welcome because it will encourage indigenous manufacturing and enhance India's competitiveness in electronics. It will also work towards bridging the significant skills gap among aspiring engineers while creating great employment opportunities for them.

Anees Ahmed, chairman and co-founder, Mistral Solutions: This is a very positive step taken by the Government to boost the Electronics Industry in India which is unable to remain competitive with other countries like China, Taiwan, Malaysia, Vietnam, Mexico, Eastern Europe etc. I hope it will also benefit the growth of the SME sector. We are yet to get more details of the scheme. I just hope the scheme is simple and straight forward with no scope for red tape.

Companies should be able to focus on design, manufacture, quality & customer delivery rather than wasting resources on procedural issues. Currently Mistral designs are used in Avionics, defence, medical, consumer electronics and other next generation electronics. We hope this scheme will enable us to better serve our customers.

Jaswinder S Ahuja, corporate vice president and MD, Cadence Design Systems; president, VLSI Society of India; and former chairman, ISA: The cabinet's approval of the Modified Special Incentive Package Scheme (MSIPS) for the electronics industry is a welcome initiative. It is a key step in addressing the huge gap – estimated at $300 billion – between locally manufactured electronics and the consumer demand for electronics that we expect to see by 2020.

It is commendable that the government has announced approvals for incentives up to Rs. 10,000 crores during the XII Plan. Also, the provision for reimbursement of central taxes and duties for setting up local fabs in future is a step in the right direction. It is also encouraging to note that a wide range of verticals can benefit from MSIPS, and also that MSIPS will provide incentives for relocation of units from abroad.

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