In an effort to strengthen electronics manufacturing capabilities in the country, the government has been considering making it compulsory that 30 per cent of the value of all government procurements should be of ‘Made in India’ electronic products.
According to draft proposal, this will extend to tenders of all government ministries, PSUs, government controlled institutions, PPP funded projects and projects under institutional funding from the World Bank and Asian Development Bank. Currently, the Indian telecom sector accounts for the maximum import of electronics hardware. If this proposal is accepted, telecommunications will be the most impacted amongst all sectors.
Fiscal incentives
During a meeting with industry representatives on promoting IT and electronics hardware manufacturing, telecom minister, Kapil Sibal, was in favour of the Finance Ministry providing fiscal incentives for telecom service providers to use products made in India to promote local manufacturing. The Telecom Regulatory Authority of India (TRAI), in its recommendations for the Telecom Equipment Manufacturing Policy, has suggested a rebate for service providers if they use a certain percentage of indigenously manufactured products in their total procurement package.
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India looking for global players to set up semiconductor plants
The empowered committee formed to promote semiconductor wafer fabrication manufacturing unit led by Sam Pitroda, advisor to Prime Minister on Public Information Infrastructure and Innovation, has decided to directly contact global chip makers so that they can set up their units in India.
Semiconductor wafer fabrication plants are used for manufacturing electronic chips that are used in electronic devices.
“We need to talk to principals who can invest in setting up facility in India. We will first focus on attracting investment in commercial market of semiconductor. Setting up units will reduce our dependency on imports besides making chips more affordable,” Pitroda said.
He also points out that, keeping in mind the growing market for mobile phones and PCs, India needs to promote local manufacturing of semiconductor. Estimates show that India’s demand for electronics products (including telecom) will be US$ 400 billion by 2020.
