Over the last couple of decades India has been the epicenter of consumer demand fuelled by a phenomenal GDP growth. While demand increased across all sectors, demand for high technology products, specifically electronic products has registered significant growth and going by current estimates, the demand for electronics hardware in the country is projected to increase from USD 45 billion in 2009 to USD400 billion by 2020 (Source: Task Force Report).
The estimated production will reach USD 104 billion by the year 2020, creating a gap of USD 296 billion in demand and production. This creates a unique opportunity for companies in the ESDM (Electronic System Design & Manufacturing) sector to look at India as their next destination to cater to the domestic Indian demand as well as act as an exports hub.
Accordingly, the Government has initiated several initiatives for the development of electronics sector in the country. The Government has recently approved National Policy on Electronics (NPE). One of the important objectives of the NPE is to achieve a turnover of about USD 400 Billion by 2020 involving investment of about USD 100 Billion and employment to around 28 million by 2020. This interalia, includes achieving a turnover of USD 55 Billion of chip design and embedded software industry, USD 80 Billion of exports in the sector. Moreover, the policy also proposes setting up of over 200 Electronic Manufacturing Clusters. Another important objective of the policy is to significantly upscale high-end human resource creation to 2500 PhDs annually by 2020 in the sector.
As part of the efforts to promote the electronics sector, we are setting up a semiconductor wafer fab in the country. India has become the hub for semiconductor design with nearly 2000 chips being designed per year and more than 20, 000 engineers are working in various aspects of chip design and verification. Annually India is generating nearly USD 2 Billion in revenues for the chip design services. This provides an enabling environment for the semiconductor wafer fab which will come up in India.
Several other policy initiatives have been approved in last few months. These include providing very attractive financial investment in electronics manufacturing and providing preference to domestically manufactured electronic goods in all Government procurement as well as all those electronic goods whose use has security implications for the country. The financial incentives are available not only for new units but also for units relocating from abroad. Besides, when we speak of electronics, apart from covering electronic hardware products relating to IT and office automation, telecom, consumer electronics, electronic components, etc., we cover a wide range of products relating to verticals like solar photovoltaic, automotive electronics, medical electronics, avionics, LED etc. To address the issue of infrastructure, a scheme for Electronics Manufacturing Cluster provides 50% of the cost of upgrading infrastructure and logistics as grant in aid from Government.
India has a vast pool of innovative and talented human resource. Our human resource is our strength which we offer to an investor from abroad. We produce over 200,000 engineers every year. We also propose to enhance the number of post graduates and PhDs in Electronics so that abundant manpower is available for Electronics industry to grow and flourish.