October was a very significant month for the electronics industry— with two major policies announced, which, if implemented in the right spirit, will dramatically transform the electronics industry for the better.
After a long wait by the industry, the National Policy on Electronics 2012 was approved by the Cabinet on October 25. The policy has received praise for its ambitious plans to make the domestic electronics hardware manufacturing segment grow into a US$ 400 billion industry by 2020.
In the same month, another significant policy—the Preferential Market Access (PMA) Policy—received a nod from the Cabinet. This policy will support domestic manufacturers and give preference to locally manufactured telecom and electronic products.
October also saw the UP government pass its much awaited IT Policy 2012, to boost the IT, IT-enabled services (ITES) and electronics industries within the state. With the approval of this policy, an IT city in Lucknow will see the light of the day.
If we look at the promises made in these policies, they appear to be welcome moves in helping the country strengthen its manufacturing base. Although the industry is elated with these developments, it is apprehensive about the implementation of these policies within a timeframe, and in the right spirit. Those in the industry unanimously feel that actions speak louder than words, and are hopeful that the policy will be implemented fast.
Similarly, while the industry has lauded the government’s intentions of encouraging domestic manufacturing for telecom equipment, it is doubtful whether Indian companies will really bag a good share of the network equipment contracts, as in the past, the major orders were hooked by European vendors. Moreover, it might be difficult to achieve positive results since India lacks an ecosystem to successfully implement the policy. Even the policy’s target of
65 per cent value addition within India, in the next five years, may not be possible as the country lacks a ecosystem for components too. The Telecom Equipment Manufacturers’ Association (TEMA) has already urged the government to rectify the policy appropriately.
Now, it will be interesting to see how significantly these policies add to the growth of the electronics industry in the coming months.
By Srabani Sen
