The Vision envisaged for the Andhra Pradesh Electronics Policy 2014-2020

A strong component manufacturing base in the country is a pre-requisite for a self-reliant ESDM sector in the country. In the recent past, the focus of policy makers is on manufacturing of electronics products irrespective of the degree of value addition. Majority of inputs such as parts, Sub-Parts, Components are allowed for import at zero or minimal duty. This policy has encouraged low value added manufacturing/assembling but simultaneously has stymied the growth of the existing component manufacturing base and FDI in the sector.

Policies for promotion of electronics manufacturing have been formulated with a long term vision but their implementation has lacked the same tenacity and a long term sustained approach for promoting high value added manufacturing. A suitable policy must support large investments in manufacturing facilities for raw materials, parts, components and PCBA/EMS for electronics. This is the segment of the ESDM value chain where there is concentration of technology and requires R&D, IP creation and continuous and consistent investments if we want to create a resilient value chain in the country. This is the only way to reduce our dependence on imports and also reduce the insecurity and uncertainty which accompanies it. 

A strong component manufacturing base in the country is a pre-requisite for a self-reliant ESDM sector in the country. In the recent past, the focus of policy makers is on manufacturing of electronics products irrespective of the degree of value addition. Majority of inputs such as parts, Sub-Parts, Components are allowed for import at zero or minimal duty. This policy has encouraged low value added manufacturing/assembling but simultaneously has stymied the growth of the existing component manufacturing base and FDI in the sector.

Challenges for Component manufacturing in India

Policies for promotion of electronics manufacturing have been formulated with a long term vision but their implementation has lacked the same tenacity and a long term sustained approach for promoting high value added manufacturing. A suitable policy must support large investments in manufacturing facilities for raw materials, parts, components and PCBA/EMS for electronics. This is the segment of the ESDM value chain where there is concentration of technology and requires R&D, IP creation and continuous and consistent investments if we want to create a resilient value chain in the country. This is the only way to reduce our dependence on imports and also reduce the insecurity and uncertainty which accompanies it. 

A strong component manufacturing base in the country is a pre-requisite for a self-reliant ESDM sector in the country. In the recent past, the focus of policy makers is on manufacturing of electronics products irrespective of the degree of value addition. Majority of inputs such as parts, Sub-Parts, Components are allowed for import at zero or minimal duty. This policy has encouraged low value added manufacturing/assembling but simultaneously has stymied the growth of the existing component manufacturing base and FDI in the sector.

Large Foreign or Domestic investments in electronic component manufacturing will happen only if India offers a cost advantage in component manufacturing. It is argued that low value added manufacturing would result in investments in component manufacturing due to demand pull. However, even low value added manufacturing will sustain if duty benefits are allowed to continue over time with increasing value addition under a PMP program.  

A two pronged approach to encourage high value added manufacturing

A strong component manufacturing base in the country is a pre-requisite for a self-reliant ESDM sector in the country. In the recent past, the focus of policy makers is on manufacturing of electronics products irrespective of the degree of value addition. Majority of inputs such as parts, Sub-Parts, Components are allowed for import at zero or minimal duty. This policy has encouraged low value added manufacturing/assembling but simultaneously has stymied the growth of the existing component manufacturing base and FDI in the sector.

A strong component manufacturing base in the country is a pre-requisite for a self-reliant ESDM sector in the country. In the recent past, the focus of policy makers is on manufacturing of electronics products irrespective of the degree of value addition. Majority of inputs such as parts, Sub-Parts, Components are allowed for import at zero or minimal duty. This policy has encouraged low value added manufacturing/assembling but simultaneously has stymied the growth of the existing component manufacturing base and FDI in the sector.

Large Foreign or Domestic investments in electronic component manufacturing will happen only if India offers a cost advantage in component manufacturing. It is argued that low value added manufacturing would result in investments in component manufacturing due to demand pull. However, even low value added manufacturing will sustain if duty benefits are allowed to continue over time with increasing value addition under a PMP program. 

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