Q) “The Electronics System Design and Manufacturing sector (ESDM) is the fastest growing sector in the world. Discuss the significance and challenges of electronic sector. Suggest measures to achieve NET ZERO Imports in electronics by 2020.” (250 words)
Electronics System Design and Manufacturing sector continues to transform lives, businesses, and economies globally. The past five years have especially seen a significant gain in the ESDM sector as the global production has undergone a shift from the USA and Europe to Asia.
Presently, India is undergoing a digital revolution. With a growing middle-class population, rising disposable incomes and declining electronics prices, there has been a definite surge in the consumption of electronics devices in India. Newer technologies like the rollout of 5G and IoT has ushered a new era for the ‘New India’.
In order to support the ESDM sector and its growth path, the Government of India has made electronics production an important pillar of many initiatives such as ‘Make in India’, ‘Digital India’ and ‘Startup India’.
Significance of ESDM Sector
- Economic: Electronics Industry is the world’s largest and fastest growing Industry and is increasingly finding applications in all sectors of the economy. Electronics hardware manufacturing is one of the important pillars of both “Make in India” and “Digital India”.
- Security: Focus on electronics hardware manufacturing up to the Chip level is required due to the growing security concerns associated with electronics hardware in critical sectors including cyberspace, communications networks etc.
- Strategic: India is a signatory to the Information Technology Agreement (ITA-1) of WTO and Free Trade Agreements (FTAs) with various countries/ trading blocs such as ASEAN, Korea and Japan. Lagging in this sector will see India overwhelmed by imports.
Challenges in the Electronics Sector:
- Lack of level playing field vis-a-vis competing nations due to several factors which render domestic manufacturing uncompetitive.
- Lack of adequate infrastructure
- High cost of finance
- Inadequate availability of quality power
- Inadequate components manufacturing base
- Limited focus on R&D by the industry etc.
Measures to make India a Hub of Electronics:
- Promoting Ease-of-doing Business- by facilitating a single window mechanism for global investors
- Encourage Industry-led R&D and Innovation- in all sub-sectors of electronics. This would encompass support for various initiatives in areas like 5G, IoT/ Sensors, Artificial Intelligence etc.
- Human Resource Development- by generating research base at Ph.D. level, opportunities for joint IPRs to Indian candidates at foreign institutions.
- Export Promotion- by providing attractive package of incentives so that exporters can compete in global markets
- Promote Cyber Security- by enhanced understanding of cyber security issues, risks; development of testing facilities etc by the start-ups.
- Mega Projects- by providing a special package which would invite extremely high-tech and huge investments in areas like semiconductor facilities, display fabrication etc.
- Promoting Eco-park for e-Waste processing
- Warehousing of raw materials
- Acquiring mines of Rare Earth Metals in foreign countries (Africa, Australia)
- Developing an index to assess the status of electronics manufacturing industry in the states.
- Encouraging FABS, Fabless design, Set top boxes, VSATs, Mobiles, Consumer & Medical Electronics, Smart Energy meters, Smart cards, micro-ATMs
- Encouraging National Award, Marketing, Brand Building
Successful implementation of the schemes introduced by the Government keeping challenges in mind can enable flow of investment and technology, leading to higher value addition in the domestically manufactured electronic products, increased electronics hardware manufacturing in the country and their export, while generating substantial employment opportunities.