Everyone in India is talking about revolutions in many sectors be they e-commerce, telecom (read 4G), health, education and the list goes on. But one sector that has been less quoted in the run-up to revolutions is electronics. Let the facts speak for itself. By 2020, India needs close to US$ 400 billion worth of electronics hardware. Gauged by the pace of domestic production, the production might perk up to US$ 100 billion. That leaves a gap of US$ 300 billion. At this rate, India's import bill on account of electronics will surpass that of the oil bill.
Economists and policy makers are wary of this trend. They believe that this single factor could widen the current account deficit (CAD) of India, which already peaked up to dizzy heights mainly on account of the heavy imports of oil and, of late, gold. There is a talk of curbing gold imports after the festival season, where gold and gold ornaments are bought as a matter of custom and ritual.
But India cannot curb the import of electronics, which is needed for its heavy automation undertaken across the spectrum of industries. The recent policy decisions like internet based jan dhan scheme (financial inclusion), Make in India, Swatch Bharat (Clean India) etc are going to push up the demand for electronics goods in India either for automation or creating infrastructure for enabling these schemes to work.
The Government has already unveiled an electronics policy, which lays down considerable importance for upping the domestic production and making India a destination for manufacturing the stat-of-the art electronics goods. There was a time, when electronics industry thought that their sector could catch up with the software sector, which made phenomenal progress in the last few decades. Their dreams were dashed when the domestic industry was thrown to cut throat competition from multinational giants. India signing the international protocol for bringing down the tariff to the zero level had witnessed the near extinct of this sector and dominance of the foreign players.
At one point of time, India had numerous players in television, automatic washing machines, refrigerators,air conditioners, radios, and several other electronic items. But most of them have bitten the dust. Barring a few, all those brands are extinct from the Indian scene. Later, the government had embarked on hardware parks and one such park was set up in Sriperumbador near Chennai. That also proved to be a flop on account of the bureaucratic hurdles and lack of policy direction.
Now a new awareness is seeping through the corridors of power. Several hardware parks are waiting to be set up. One such park is going to be set up in Delhi. Another park n Bhiwadi in Haryana is about to be commissioned soon. In a few years time, many such parks will dot across the breadth and length of the country. This throws open unique investment opportunities in the country. As per the recent report, the hardware park in Bhiwadi already attracted investments from over 50 foreign companies. It is an 100 acre park, which will have employee hostel, manufacturers of components which go into the final electronic goods, facilities for treating e-waste, captive power units etc. Also, it boasts of easy sourcing of skilled manpower and reportedly flexible labor laws.
Admittedly, this experiment will be a game changer in India's march towards augmenting the domestic production in electronics. Undoubtedly, it will be a great opportunity for the foreign companies to set up their bases in India. For more details: Mail us: Business Economics and services team, E mail:jthac1234@gmail.com, jthac1234@yahoo.com
