This seems quite a possibility as the stage has been well set with the Indian government’s latest initiatives to boost manufacturing in the electronics industry. Now, it remains to be seen how well industry takes advantage of these policies and starts investing in manufacturing.
Wednesday, January 09, 2013: In the next five years, India will emerge as the second best in manufacturing competitiveness, behind China. It will also have a competitive edge over manufacturing stalwarts like the US, Germany and Japan. These startling predictions have been brought forth by the 2013 Global Manufacturing Competitiveness Index report by Deloitte Touche Tohmatsu Ltd’s (DTTL) Global Manufacturing Industry Group and the US Council on Competitiveness.
The country’s strong talent pool in the areas of science, technology and research, in conjunction with the lowest labour rates in the world, are cited by the survey as significant competitive advantages that would positively impact India’s ability to conduct cost-efficient research and development.
Importantly, the report mentions that the National Manufacturing Policy of the Indian government will help lower taxes, provide faster permits and ease labour laws. Through this policy, India plans to boost the share of manufacturing from 16 per cent of GDP in 2009 to 25 per cent by 2022, while also adding 100 million jobs in the manufacturing sector by 2022.
The report also mentions that India’s economy witnessed extraordinary expansion, achieving a five-year CAGR rate of 7.8 per cent in 2011, and in the last five years its manufacturing exports grew at a CAGR of 17.1 per cent.
Govt initiatives will help this happen
The stage has been set with the Indian government’s latest initiatives like the National Manufacturing Policy, National Electronics Policy, Modified Special Incentive Package Scheme (M-SIPS), and Electronics Manufacturing Clusters scheme—all aimed at boosting manufacturing in the electronics industry. Now, it remains to be seen how the industry takes advantage of the policies and starts investing in manufacturing.
The seriousness of the Indian government in boosting electronics manufacturing was also evident when the Prime Minister, Dr Manmohan Singh, while speaking at the ‘India Telecom 2012’ held in New Delhi in December 2012, strongly encouraged the industry to take up electronics manufacturing and create the ecosystems to enable India to be a major producer of electronics hardware. “The government is committed to doing everything possible to support such efforts. …Now it is for the captains of our industry, particularly in the private sector, to seize the opportunities of the unique government initiatives,” the Prime Minister said.
The government will also notify five clusters for the manufacture of electronic products by February 2013, to cut import dependence on these items. These clusters will also get financial support of up to Rs 500 million from the government.
Another recent government initiative is to make it mandatory for all electronics goods manufacturers in the country to get standards-compliant certificates from the Bureau of Indian Standards (BIS). It will be applicable for electronic products imported or manufactured after April 2013. This step will help to reduce the sale of electronic goods in the grey market. Currently, about 30 to 40 per cent of the electronics goods sold in India are sold in the grey market.
“To safeguard consumers, we have made it mandatory for the electronics manufacturer to get a standards-compliant certificate before selling goods in the market,” a senior official of the Department of Electronics and Information Technology (DeitY) said. The department had issued an order pertaining to this earlier this year.
In a nutshell, over the long term, India’s workforce skills, cost advantage, improved policies and regulations, and significant investment will boost its competitive advantage and help maintain the country’s position as a strong contender on the global manufacturing front.
Current competitiveness
Competitiveness in five years
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine
