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Archive for October 3, 2011

ESDM all over again? When will Indian semicon and electronics industries learn??


Today, the government of India released the National Policy on Electronics titled: Policies to drive national agenda for ICTE: National policy on Electronics 2011 (NPE 2011). One glance is sufficient to note: it is the same old thing in new bottles! There is the dreaded ‘ESDM’ all over again! Easy to say, (but) difficult to manage — electronics system design and manufacturing!

Oh! Where were those folks about 15-20 years ago, who have written this policy, especially when the world had started to make the first movements toward a solid electronics infrastructure back in the mid- to late-1990s? India was and still remains a good 15-20 years behind, as far as electronics and semiconductor industries are concerned! Yes, I am very well aware that there are certain Indian electronics manufacturing companies. They all do creditable work for the global MNCs!

Now, I’ve been requested to write nice things about ESDM! So be it!! First, ESDM does not exist!! Frankly, there is no need to coin any new and special terminology to boost the electronics and semiconductor industries!!!  At least, I don’t see any other booming global economy of the world that has coined a special term to do that!! So, why India? All that those nations have done is to focus on R&D and product development, instead of resorting to any terminology! Perhaps, it would be wise for India to follow that path, if it so wishes!

Second, please get specialists to develop the national electronics policy. Else, can I do it?? I am not qualified, though! Besides, I am just a small-time blogger who people don’t really notice!!

Third, where is the electronic components industry in India? It has been said in the policy that ‘electronic components, which are basis of an electronic product, are low volume low weight, cheap and easy to transport across the globe. Moreover, under Information Technology Agreement-1 (ITA-1) of the World Trade Organization, which came into force in 1997, a large number of electronic components and products are bound with zero tariffs making trade unrestricted across international borders. Also, the electronics manufacturing is characterized by high volume and low margins. All these have resulted in the electronics hardware industry being globally integrated with few large global players catering to a large part of the world.’

I am sorry, I don’t agree!

Can you show me one single Indian company manufacturing quality electronic components? There used to be some, in the early 1990s, but those have long vanished! Has anyone ever wondered why? Were their components not good enough? Were the tariffs higher than average? Was it global competition that forced them to exit? Please find out the reasons!

Without the presence of a solid local electronic components industry, forget about ever developing a good, strong and robust Indian electronics and semiconductor industries! Read more…

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