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Manufacturers'
Association of Information Technology (MAIT), established in 1982, is the apex
body representing India’s ICT (Information and Communication Technology)
sector. MAIT is recognised by both the Government as well as the industry for
its role in the growth and development of the IT hardware industry. In this
interview, George Paul, CEO, MAIT, shares his views on some of the
recent policy announcements and outlook for the electronics hardware industry.
How
do you analyse the performance of the electronic hardware industry in recent
years?
The
electronics hardware industry is a sector much in the news over the last two
years, beginning with the trade war between the US & China triggered by the
need felt by the US to block transfer of technology to China in electronics, to
the Covid set off burgeoning demand for digital connectivity and
infrastructure, the shortage semiconductors and the PLI (Production Linked
Incentive) led initiative to promote electronic manufacturing in India.
What
are key challenges before companies operating in the electronic hardware
industry?
The
electronics hardware industry demands its companies to continuously innovate.
In electronics, the evolution of technology and products is so rapid with
product life cycles shrinking to as short as three to four months. Unlike other
sectors, where once a company has mastered a value proposition, the same is
relevant for at least a decade. This showcases the need for electronic hardware
companies to invest in R&D. R&D is a high-risk expensive activity for
an MSME, particularly during the covid crisis.
In
December 2021, the government of India announced the PLI Scheme for
semiconductors. How will the Indian industries benefit from this decision? Can
India provide a conducive environment for semiconductor manufacturing?
The
PLI scheme for electronics has an outlay of Rs 1.5 lakh crores to attract
global companies to shift their manufacturing of products into India. These
anchor companies in turn will drive the setting up or pulling in of upstream
and downstream industries who will cater to them.
For
example, just the PLI for products will trigger approximately $ 200 billion of
electronics manufacturing. If one were to take a conservative 15% as the value
of the mechanics i.e. plastics and metal that go into these electronic
products, India has a $ 30 billion opportunity.
The
product manufacturing by the anchor companies under the PLI scheme is an “Assembly
Manufacturing†at a system-level assembly and the Printed Circuit Board (PCB) assembly.
This assembly manufacturing will trigger the local manufacturing of the
sub-assemblies of these products. As per MAIT projections, India should see at
least $ 100 billion of sub-assemblies being manufactured by Indian MSMEs.
Each
of these PLI’s has built them into PLI for sub-assemblies and components. These
PLI schemes are targeted at MSMEs to manufacture components that are required
by these products.
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INDUSTRIAL PRODUCTS FINDER (IPF) is India’s only industrial product portal. Referred to as the ‘Bible’ of the manufacturing sector in India,
INDUSTRIAL PRODUCTS FINDER (IPF) is India’s only industrial product portal. Referred to as the ‘Bible’ of the manufacturing sector in India,
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