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Information Communication Technology & Electronics (ICTE)
1.
Information Communication Technology
& Electronics (ICTE)
2.
© Confederation of
Indian Industry Content Sectoral Snapshot The Potential Advantage India Major Challenges faced 2
3.
© Confederation of
Indian Industry 3 Sectoral Snapshot 2% Contribution to global production (~USD 31 Billion) 2% Sector’s Contribution to GDP 100% FDI allowed under automatic route; sector delicensed barring strategic electronics ~12% Sector’s Contribution to Manufacturing GDP ~3.3% of total FDI captured by ICTE Sector in 2014-15 ~3.3 Million employment generated by sector
4.
© Confederation of
Indian Industry 4 Advantage India Reason 1 Large market potential and growing purchasing power; Mobiles leapfrogging PCs. Reason 2 Government initiatives on Digital India, Smart cities, expansion of broadband network, increasing emphasis on online delivery of services and growing market for e-commerce. Reason 3 With rising costs of manufacturing in the neighbouring countries in South East and Far East Asia, large investors are looking for alternate destinations closer to major markets. Reason 4 Large pool of engineering and managerial manpower, strong design and R&D capabilities Potential* The National Policy on Electronics (NPE) 2012 aimed at creating an eco-system for achieving a turnover of ~USD 400 billion by 2020 involving investment of about USD 100 billion and additional employment of around 28 million people, across all segments of the industry. - Average growth last 5 years: 9% (in USD) - Average growth next 5 years: 30% (in USD) *Source : DeitY, Ministry of Communications and IT
5.
© Confederation of
Indian Industry 5 Current Growth Drivers Policy and Eco-system National Policy on Electronics 2012 A Modified Special Incentive Package Scheme (M- SIPS) Approval of two Semiconductor Wafer Fabrication facilities Preference to Domestically Manufactured Electronic Products (DMEP) in Government procurement, Incentives for setting up of Electronic Manufacturing Clusters (EMCs). To safeguard consumer interest, 30 products have been identified requiring conformity to safety standards. Policy for setting up of Electronics Development Fund has been notified Industry Evolution and Capabilities • Initial focus on consumer electronics but since expanded as follows: Communication sector : 31% Consumer Electronics: 23 % Components : 15% IT Hardware : 14% Instruments, Process Control, Power Electronics etc : 12% Strategic Electronics : 5% • Industry distributed in almost all States with large concentrations in Andhra Pradesh, Karnataka, Maharashtra, NCR and Tamil Nadu. Market Estimated at ~ USD 80 Billion in 2015-16; over 60% of the demand is being met through import. Almost 80% of the demand of components is being met through imports. Product categories driving the market are - Flat Panel TV, Mobile phones, Notebooks, Desktop Computer systems, LCD Monitors, Inverters/UPS, Power supplies, BTS, Set Top Boxes, LED/CFL lighting. Electronic Manufacturing Services are being leveraged for catering to the market by domestic as well as by foreign vendors.
6.
© Confederation of
Indian Industry 6 Major Challenges faced by sector High disabilities on account of high cost of finance, power and transportation/logistics which are estimated to be about 10% for 50% value addition Impact of zero duty regime ushered in on account of India being signatory to Information Technology Agreement (ITA) - 1 Inverted duty structure due to adverse impact of ITA-1/zero duty (ICTE products) Domestically manufactured products are general not as competitive Lack of supporting competitive domestic components/supply chains Domestic demand not consistent with the potential-leading to low volumes of production Insufficient leveraging of IP creation and development of products customized to domestic market.
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