Commencing its operations in 1967, Rosy Electronics Pvt Ltd has emerged as a key player in the field of transformers and inductive wound components. While the business of magnetics has been witnessing a steady growth over the past few years, there are other areas that require urgent attention. Neeraj Bharara, director, Rosy Electronics, in a conversation with Anwesh Koley of Electronics Bazaar, shares his views on the Indian electronics industry vis-a-vis the global scenario and certain industry-related issues that need to be addressed immediately
EB: Brief us about your current operational structure.
We are currently focusing on the coils and magnetics segment as these are competitive domains for our customers. Our thrust is on magnetics and Rosy Electronics is the market leader in this segment. Apart from this, we have two other units involved in EMS, where we produce LED drivers and Completely Knocked Down (CKD) street lighting solutions for Toshiba’s plants in the US. Our enhanced portfolio also includes the production of set-top boxes and notebooks, which are distributed to government organisations.
Our four-year association with Toshiba is a testimony of our high quality standards. Even the notebooks that we manufacture are meant to be distributed to all the IITs across the country and the product has been perfected by IIT Mumbai. We are all aware of the high educational standards in these institutions and our association with them certifies our quality.
EB: How important is it to adhere to quality standards while ensuring competitive pricing in the electronics segment?
Adhering to stringent quality norms is an unsaid requirement of this industry. Consumer awareness levels have become very high with innovations and technical breakthroughs being accessible with no time lapse. Thus, a sub-standard product stands little or no chance of surviving in the market.
Currently, all our production processes and operational systems are based on international standards. We believe in a ‘no-compromises’ policy for all the verticals we operate in. If we consider the quality of the final product, there is minimal difference between a product manufactured in China, Taiwan or in India, due to the high speed of technology transfer. What essentially makes a difference is the quality standards followed and the production systems in place.
Our quality levels are determined by our end customers and we diligently follow them. Large customers like Philips, Panasonic and Anchor have their own prescribed specifications and are very serious about them. They conduct regular audits and quality checks to ensure that the final product does not deviate from their requirements. The electronics industry is globally interlinked and open, so standards are known by all. If your process cost is high, survival becomes an issue. The duty structures prescribed by the World Trade Organisation (WTO) remain the same worldwide, and markets are quick to identify variations in pricing and address the anomaly. Today, Indian manufacturers have become competent enough to successfully compete with international players without any variation in quality.
EB: How do you view the current government policies for this industry?
A lot of policy changes are being witnessed at various levels, but their implementation remains an area of concern. The true impact and benefit of these policies can only be judged once they are implemented and the industry can adopt them effectively. Due to the multiple levels of authority in our bureaucracy, it is a challenge for a policy to be executed within the stipulated timeframe. Also, there is often a mismatch between the industry’s requirements and what the government policies focus on. Decision makers at various levels need a better understanding of our requirements in order to formulate a beneficial policy.
However, with a new government at the Centre, the manufacturing sector is hopeful of change. The service sector sustains an economy to a certain extent, but growth comes primarily through industrialisation. Schemes like the Modified Special Incentive Package Scheme (M-SIPS) appear to ease the financial burden on manufacturers, but what needs to be looked into is how many applicants have actually received the reimbursement promised by the scheme. As a draft, it might seem to boost the ‘Make in India’ initiative, but again, if manufacturers are unable to garner its benefits, it merely remains a document.
EB: Could you identify the major areas of concern for the Indian electronics industry?
The majority of companies involved in the Electronics System Design & Manufacturing (ESDM) sector are assemblers, not manufacturers. We need to have an efficient supply chain in place to benefit from the economies of scale and reduce our dependence on imports. For magnetics, we do not have any raw material manufacturer in India and all primary requirements are imported. Products of local companies are not up to the quality standards prescribed by our customers.
This was not the scenario earlier. Prior to Chinese products invading the Indian market in the late 80s and early 90s, we did have a functional supply chain in place with an efficient manufacturing setup. However, this unfair competition severely harmed Indian manufacturers who did not enjoy the policy benefits that the Chinese government offered its companies.
EB: Do you perceive a significant investment aversion amongst domestic manufacturers and suppliers?
At present, we have a dearth of quality manufacturers and suppliers. This has much to do with the uncertainty about a stable future. Due to widespread scepticism in the market, existing stakeholders are unwilling to invest further in the latest technology and are content with their current levels of operation. This is a serious cause of concern, as stagnation never leads to growth.
This, again, has much to do with government policies which should encourage domestic manufacturers to invest in their businesses. Indian manufacturers are willing to take risks, but lack a conducive policy implementation structure. This does not instil confidence. Long-term policies with the assurance of a defined benefit will go a long way in ensuring investments and simultaneous growth.
We require a level playing field to compete with international manufacturers. While the machinery, components and equipments can be procured as per globally accepted standards, our government policies with respect to taxation, labour and financial assistance are vastly different from our international counterparts. This leads to additional costs, which eventually increases the selling price of the product. The domestic industry can absorb costs to a limited extent; the rest has to be passed on to the end consumer.
The legal framework should cater to pan-India requirements. Giving financial and other incentives to certain geographical pockets hampers holistic growth. Also, in regions like Delhi NCR, where business units are spread across four states, the existence of separate duty structures creates a lot of confusion, resulting in a sluggish production process.
EB: What would be your suggestion to young entrepreneurs willing to enter the electronics domain?
Electronics is a challenging segment to operate in as one constantly needs to innovate. Stagnation means the end of the road for any business house and this is what also makes this segment enjoyable to be in. Changes are happening every moment and stakeholders around the world are waiting to grasp, adopt and implement these changes in a manner that is mutually beneficial for all. Indians, with their ability to innovate and take risks, stand a great chance in making a significant mark in this dynamic segment.
