The Union government has given its nod to the Pune-based Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) to set up a brownfield electronics cluster in Pimpri industrial area. The project will come up with a proposed investment of Rs 70.88 crore. In this interaction, Satish Magar, President, MCCIA, elaborates about the project. Excerpts:

What will this cluster offer?

The cluster, conceptualised by the MCCIA under the Union government's cluster development scheme for various industrial sectors, will enhance testing, designing and prototyping capabilities of small and medium enterprises which lack the financial muscle to invest in the expensive equipments necessary for these activities. The cluster project will consist of a common facility centre (CFC), which will have several such facilities, including a designing centre, environment laboratory and test and measurement laboratory. The project will entail an investment of Rs 71 crore of which Rs 50 crore will come from the Union government as grant-in-aid and the rest will come as contribution from the chamber members.

How will this help on a larger scale?

The cluster will assist the process of making in India products the country currently imports. India's electronics imports in foreign exchange outgo are the second largest after its oil imports. Therefore, making electronics components in India will lead to significant savings of these resources. Also, this facility centre will help the electronics industries in Pune and surrounding areas in terms of providing access to the latest technology along with cost-competitiveness and faster turnaround time. This will eventually enable Pune region to become a default destination for electronics design-led manufacturing.

How will it encourage new players in the electronics industry?

The cluster will help develop an entrepreneurial ecosystem, drive innovation and boost economic growth by increasing employment opportunities and tax revenues. It may work out on the same lines as information technology, which has been a great growth engine for Pune. The city already has human resources suitable for the electronics industry along with a broad base of industrial units manufacturing electronics components with an estimated business size of Rs 1,000 crore. In fact, Pune has a rich history of research and innovation and over the years it has emerged as the engineering capital of our country. We strongly believe the city can contribute significantly to the future growth of the electronics and semiconductor sector in India.

How does the MCCIA propose to go about the process?

The India Electronics and Semiconductor Association (IESA), a trade body representing the Indian electronics system design and manufacturing (ESDM) industry, is assisting the Maharashtra government in setting up this cluster. The trade body has signed a memorandum of understanding (MoU) with the MCCIA for collaboration under the EMC scheme of the Department of Electronics and Information Technology, Government of India. We have set up a special purpose vehicle called the MCCIA Electronics Cluster Foundation, which is a not-for-profit company under Section 8 of the Indian Companies Act. This SPV has invited other electronics manufacturing companies to become members. It proposes a financial model wherein the services of the common facility centre will be available for them at a low-cost on 'pay per use' basis. Non-members can also avail of these facilities.

How has been the response from the electronics industry?

We have already identified about 212 small-scale units which, interestingly, include 40 to 50 defence equipment manufacturing companies for the cluster. The response has been very encouraging and we hope to get it up and running by March 2016. The fact that clusters work for Pune is proved by the growth of the automotive clusters in Chakan, Ranjangaon, Bhosari, Hinjewadi and so on which today have the presence of some of the biggest multinational automotive manufacturing such as Volkswagen, Mahindra & Mahindra, Tata Motors, Force Motors, Mercedes-Benz, etc. Thus, there is confidence that the electronics cluster will work too.

Has the MCCIA been proactive about the electronics sector in the past?

The MCCIA's Electronics Committee is one of the oldest functioning committees with a mission to undertake all such activities that can place Pune on the global map of the electronics industry. The committee does this by creating a database of electronics industry in Pune, conducting training programmes, workshops, seminars, presentations and meetings, exploring possibilities of approaching overseas' markets through business delegations, etc. MCCIA along with the Ministry of Information Technology, Government of India and GTZ, Government of Germany has promoted the Centre for Electronics Test Engineering (CETE) in Pune. This is to cater to industries in western India with a special focus on industries in Pune.