Over the last couple of decades India has been the epicenter of consumer demand fueled 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 2023. The estimated production will reach USD 104 billion by the year 2020, creating a gap of USD 296 billion in demand and production.
IPHW Division has been mandated to promote electronics manufacturing within the country. In order to promote manufacturing of electronic goods, it is required to lay down policies and assist and advise other Ministries/Departments e.g. Ministry of Finance, Ministry of Commerce & Industry, Ministry of Environment & Climate Change etc., in formulation of policies, co-ordinate with industries and industry associations to get their inputs and opinions regarding various disabilities faced by them and cause & extent of these disabilities and formulation of appropriate policy intervention for accelerating manufacturing. It also involves co-ordination with State Government agencies and liaison, facilitation and hand holding foreign investors who are interested in investing in India. For this purpose, road shows, bilateral meetings and participation in international events for soliciting foreign investors to put up manufacturing plants in India is also coordinated by this division.
2. In recent years, activities in this Division have increased manifold. Due to policies of duty differential and Phased Manufacturing Program (PMP) incentives, there has been significant growth in the manufacturing of mobile phones and other electronics goods. ‘Make in India’ is showing significant pull in recent years and industry is demanding similar policies for different sectors of electronics manufacturing.
A) Policy Interventions: This requires significant amount of work in consulting the Industry Organizations, compiling the suggestions received from them, Collecting data from different sources in respect of manufacturing, import and export of different electronic goods (they run into hundreds), their sub-assemblies and components, validating the data from different sources, analyzing them, draw conclusions and then present the case to Ministry of Finance or Ministry of Commerce & Industry suggesting suitable policy/fiscal interventions. It also involves suggestions and recommendations about HS Code for the goods. This is a huge and specialized task and existing manpower in the Division is ill equipped to handle it. At present, it is being done on ad-hoc basis and at times, some data received are shared without cross verifying them adequately with authentic sources.
Policy interventions like Phased Manufacturing Program (PMP) and Notification of electronic products under the Public Procurement (Preference to Make in India) Order (PPO) 2017 require close interaction with the industry and in depth analysis of manufacturing processes, raw materials and sub-components used in manufacturing of different products, for which these interventions are proposed. It also requires study of their availability within the country and outside, cost differentials and other aspects that affect the manufacturing of the product at competitive prices. This again requires specialization of different kind than the one mentioned in earlier para, which is not available in the Division. Due to this, we unduly rely on the data provided by the Industries and Industry Associations, without adequate verification and validation. It would be much better if such dependencies are avoided. Situation is likely to become worse in coming years as the manufacturing activities have picked up and different sectors are demanding PMP and PPO - 2017 for them also, in addition to other incentives/interventions.
B)Facilitating Investors: In order to promote investment in the country, especially Foreign Direct Investment (FDI) in electronics sector, MeitY participates in various International exhibitions, road shows, where large Industrial houses are solicited for investment in India. This Division then follows up with them, co-ordinates their India visit, ties-up their visits with the State Government agencies and tries to resolve any investment related hurdles faced by them. It also maintains a database of potential investors in this field and liaises with them to know if any one of them is interested in investing in India.
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