Security Today

National Policy on Electronics 2012

Electronics Industry reported at USD 1.75 Trillion is the largest and fastest growing manufacturing industry in the world. It is expected to reach USD 2.4 Trillion by 2020. The demand in the Indian market was USD 45 Billion in 2008-09 and is expected to reach USD 400 Billion by 2020. Domestic demand is expected to be driven by growth in income levels leading to higher off-take of electronics products, automation demands of corporate sector and the government’s focus on e-governanoe. The domestic production in 2008-09 was about USD 20 Billion. However, the actual value-addition in the domestically produced electronic product is very low, ranging between 5 to 10 percent in most cases. At the current rate of growth, the domestic production can cater to a demand of USD 100 Billion in 2020 as against a demand of USD 400 Billion and the rest would have to be met by imports. This aggregates to a demand supply gap of nearly USD 300 Billion by 2020. Unless the situation is corrected, it is likely that by 2020, the electronics import may far exceed oil imports. This fact goes unnoticed because electronics, as a “meta resource” forms a significant part of all machines and equipment imported, which are classified in their final sectoral forms, for example, automobiles, aviation, health equipment, media and broadcasting, defence armaments, etc. lt is also pertinent to note that Indian electronics hardware production constitutes only around 1.31% ofthe global production. On the other hand, the share of global electronic equipment production of the largest contributing nation has increased from 17% in 2004 to 33% in 2009. Conversely, the country’s imports are expected to rise from 50% to 75% even as demand is rocketing.

India is a recognised giobai player in software and software services sector. It lags behind in electronics hardware manufacturing capabilities, though it is increasingly becoming a destination for chip design and embedded software. The vision is to transform India into a global hub for electronics system design and manufacturing (ESDM) so as to meet the growing domestic and global demand. There are many challenges to advance the same infrastructure gap, tax structure, supply chain and logistics, inflexible labour laws, limited R&D focus, inadequate funding and limited value addition. Recognising the importance and potential of the Electronics Sector, several economies in the Asia-Pacific region have repositioned themselves through infrastructural investments and proactive policies to emerge as a global power-house in this field.

 

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