A finalized National Policy on Electronics 2012 was approved by the Union Cabinet which is set to incubate a $400 billion Electronic System Design and Manufacturing (ESDM) sector and employ over 28 million or 2.8 crore people over the next 8 years.
The policy envisages a domestic ESDM industry that is globally competitive. Creating an eco-system to harbor this sector will require an investment of $100 billion. The policy also strategizes setting up a National Electronics Mission which will see participation of the industry.
Key objectives under the National Policy on Electronics 2012 include growth of the local chip making sector on a very large scale and building a domestic supply chain of electronic parts and components. This is in addition to developing the ability to indigenously service and develop core infrastructure and strategic sectors including defence, railways, space, power, telecom, medical, automotive, etc.
"ESDM is of strategic importance as well. Not only in internal security and defence, the pervasive deployment of electronics in civilian domains such as telecom, power, railways, civil aviation, etc. can have serious consequences of disruption of service" said the press release.
To facilitate the growth of the sector, the cabinet has approved strategies that signal provision of fiscal incentives for investments in setting up manufacturing and fabrication facilities of various electronic products.
Currently Intel Corporation is the world’s largest chip maker followed by South Korean multinational Samsung Electronics. Dallas based Texas Instruments is the 3rd largest while Toshiba and Renesas Electronics, both Japanese, are 4th and 5th largest respectively. While, Japan is known to have the world’s largest electronics industry.
To satisfy the demand for skilled workers in the sector, the policy aims to put ‘special focus’ on increasing postgraduate education. 2,500 PhDs are expected to graduate on an annual basis by 2020. An institute for semiconductor chip design has also been proposed.
National Policy on Electronics 2012 seeks to narrow down the gap between imports and exports for electronic goods. The press release indicated that by 2020, only 25% of domestic demand for electronic goods will be met by domestic production at current rate of growth. The rest will have to be imported, driving the sector’s import bill higher than that of oil.
The strategies outlined in the policy aim to correct this imbalance and help the EDSM sector grow its exports nearly 15 times from $5.5 billion to $80 billion by 2020.
The issue about India’s spiraling electronics import bill possibly surpassing that of oil was recently highlighted by Forbes when the National Policy on Electronics was in its draft stage. It was predicted that if the envisaged ecosystem becomes a reality, India could see digital classrooms, remote healthcare delivery and efficient national resource management practices among other improvements.
Cyber security also emerged to be a part of the core strategy of the policy. It expects indigenous products to help strengthen the cyber security of the ecosystem.
Addressing a national and industry wide concern, the government had recently announced that a permanent public-private partnership Joint Working Group will be set up to tackle cyber security issues in India.