View from India: Electronics sector seizes opportunity for economic growth

The Covid-19 pandemic has triggered an acceleration of India’s digital ambitions.

Covid-19 has put India’s digital journey on a fast track. “On the positive side, the pandemic has given better visibility to contactless payments and mobile commerce. Companies have cut down on work-related travel. Remote working is encouraged. Consequently, India has registered 30 per cent increase in the usage of data and internet in the last few months,” said K. C. Ang, general manager, International Fab Operations, Global Foundries.

The adoption of virtual reality (VR); augmented reality (AR); machine learning (ML); artificial intelligence (AI), and automation are other outcomes of the pandemic-driven disruption.

“From the consumer perspective, the move towards digital is being increasingly felt. Though initially people were hesitant, e-learning modules are being packaged into various streams of education. Many doctors who didn’t have a smartphone are now doing teleconsulting,” said Dr BVR Mohan Reddy, executive chairman, Cyient.

Verticals such as agriculture are becoming more digitally oriented. Agriculture data will help ascertain the quality of crops, after which farmers can determine their price.

Going ahead, it is expected that the speed of computing will increase; sensor devices will be mass produced and become more affordable, and algorithms will be written for decision making. “The pandemic has drastically transformed the business landscape, besides impacting the digital economy. It has accelerated national initiatives such as Digital India, Startup India and Make in India,” added Dr CN Ashwath Narayan, Deputy Chief Minister of Karnataka.

From the technology standpoint, the Electronics System Design and Manufacturing (ESDM) sector can propel the growth of all three initiatives. The fact that India has over 500 million smartphone users is an added dimension to the digital economy. This has urged global mobile companies to set up assembly-manufacturing units in India. In turn, this has boosted the electronics industry, as well as creating new employment opportunities.

The big picture of ESDM draws attention to the National Policy on Electronics 2019 (NPE 2019), which was envisioned to position India as a global hub for ESDM. NPE 2019 also promotes domestic manufacturing and export in the entire value-chain of ESDM for economic development. It aims to achieve a turnover of $400bn USD by 2025.

In order to make India digitally enabled post-Covid, the Government of India (GoI) launched three schemes in April 2020. Production Linked Incentive Scheme (PLI); SPECS, or the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, and Modified Electronics Manufacturing Clusters (EMC 2.0) are schemes that are estimated to generate around five lakh direct and 15 lakh indirect jobs. Clearly, the ESDM sector is moving Digital India, Startup India and Make in India forward with its thrust on job creation.

A major driver of the ESDM sector would be the participation of the private-public sector, wherein the government would be the enabling arm. “By 2025, the electronics market is projected to grow to $400bn. Karnataka contributes 60 per cent to India’s ESDM exports. This needs to be scaled up by leveraging the talent pool in the state,” highlighted Dr Ashwath Narayan.

Karnataka has adopted a multi-faceted approach towards the adoption of ESDM. The state, under its ESDM Policy (2017-2022), has promoted 2,000 ESDM startups, besides evolving into a hub of chip design companies. The Government of Karnataka (GoK) is building a talent pool of professionals by establishing the Semiconductor Fabless Accelerator Lab (SFAL). A VLSI (very large-scale integration) Incubation Center in Hubli, industrial sectors in 13 districts and seven special economic zones (SEZ) are other initiatives for the promotion of the ESDM sector.

GoK hopes to generate employment for one lakh individuals through ESDM-led manufacturing. The focus will be on mobile phones and electronics, along with the production of solar cells and LED lights.

Electronics is essential for strategic growth. There’s a pressing need for promoting electronics now, because the upcoming electronics devices need to package 5G technology. Electronics manufacturing should be given a push, deployed at scale and production units should be able to create products and components for the world.

“The electronics ecosystem needs to be enhanced. The path for semiconductors in India can be strengthened by scaling up the intellectual property (IP) quotient. Collaboration between private enterprises, employees, government and international trade is important,” explained Ang. All this will help India reinforce its position in the ESDM sector.

These insights were shared at the IESA Vision Summit 2020, where the theme of the virtual global platform was ‘Intelligent Electronics: Driving self-reliant digital economy: Transforming 1.3 Billion lives’. IESA or India Electronics and Semiconductor Association is the industry body for the ESDM industry in the country.