Following the China model for electronics factory clusters

[karan21]

To rev up domestic manufacturing of electronics items, the government will start creating manufacturing clusters in the country, on the lines of those present in China and Taiwan.

The clusters would be set up through public-private partnership. The Centre would grant financial assistance of up to Rs 50 crore to companies or state governments for setting up each cluster.


The financial grant would depend on the structure of the project. For new and expanded clusters, assistance would be restricted to 50 per cent and 75 per cent of the total project cost respectively subject to a ceiling of Rs 50 crore per 100 acres, a senior government official said. The government is expected to create at least 50 electronics manufacturing clusters across the country under the scheme in the next five years.
Though, the exact investment by the Centre is yet to be finanlised, it is expected that the government will spend around Rs 2,500 crore to establish the clusters. The scheme called Electronics Manufacturing Clusters (EMCs) is a part of the National Electronics Manufacturing policy approved by the Cabinet in October.

“The government is in the process of finalising the guidelines for the EMC scheme. By January 2013, we will finalise the details and start inviting applications from individual companies as well as state governments,” he added.

Already states such as Andhra Pradesh, Punjab, Rajasthan, Karnataka, West Bengal and Kerala have expressed interests in setting up manufacturing clusters.

Under this scheme, there is a proposal to form special purpose vehicles (SPVs), which would take care of the common infrastructure such as road connectivity, water and power supplies. The SPVs will get financial assistance in the form of grant-in-aid.

Private companies, industry associations, financial institutions, research and development institutions, state or local governments or their agencies and units within the EMC, may promote the SPVs, according to the scheme.
Following the China model for electronics factory clusters







Also recent developments
Govt to notify five electronics manufacturing clusters by Feb
NEW DELHI: The government has set a target to notify five clusters for manufacturing electronic products by February in its bid to cut import dependence of such items.

Each of these clusters, which will house the eco-system required for manufacturing specific kinds of devices, will also get financial support of up to Rs 50 crore from the government.

The plan to notify five electronics manufacturing clusters is part of three-month agenda finalised by Telecom and IT Minister Kapil Sibal with Department of Electronics and Information Technology (DEITY).

Each of these clusters will get support of up to Rs 50 crore from government.

Confirming these information, DEITY Joint Secretary Ajay Kumar said: "There are proposals from industry associations for setting up clusters. We have to verify them which will take some time. The target is to notify five clusters within next three months."

The government on July 3 approved the Electronics Manufacturing Cluster scheme which aims to reduce the country's dependence on imports for various electronics items.

The country imports electronics items worth about $40 billion at present, according to Electronic Industries Association of India (ELCINA). The National Electronics Policy draft forecasts such imports to touch a whopping $300 billion by 2020.

ELCINA, which has announced its plan to set-up cluster, said the association is waiting for guidelines for setting up clusters before it starts working on the identified clusters.

"The scheme has been notified but we are waiting for final guidelines," ELCINA Secretary General Rajoo Goel said.

He said the interest from investors for these proposed clusters has also increased.

"Earlier, member groups of 15-20 companies had confirmed their interest for these model clusters but now there are around 25-30 companies," Goel said.
http://economictimes.indiatimes.com...ring-clusters-by-feb/articleshow/17635528.cms

 

[KRAIT]

Good to see we are learning from their ways to boost our industry.

 

[karan21]

Good to see we are learning from their ways to boost our industry.

TBH I am extremely interested in this policy. First step to development in any sector is to form companies that have some capacity. The electronics manufacturing scheme with 50 crore inventives will take care of that.

The beginning would be manufacturing basic components like RAM, modems, adapters, Hdmi cables, usbs, phones and consumer goods. Soon this could lead to designing and manufacturing computers.

Benefits to India: No shortage of electrical engineers. We produce them in bulk quantity both in good and bad quality.

India has an extremely strong software sector and its time to test it in manufacturing.

 

[KRAIT]

India has an extremely strong software sector and its time to test it in manufacturing.

I remember Steve Job's Iphone presentation when he quoted a person who said that software people should build their own hardware.

Its a mix that will give us an edge over others. Another thing is collaboration with foreign hardware giants to build local industries.

 

[karan21]

The only thing India lacked in Electronics manufacturing was the policy. Now we have it. When Indian embraced IT with new policy in 90s it became the largest exporter of it products. Something similiar happened in automobiles and pharma in last 40 yrs especially after opening up the sector in 1991. SEZ policy has also been fairly successfull but its real potential will be realized with time.

Now will this policy be the next big thing. Hopefully yes.
Cabinet approves National Policy on Electronics 2012

ew Delhi, Oct. 25 (ANI): The Union Cabinet on Thursday approved the National Policy on Electronics 2012.
The draft National Policy on Electronics was released for public consultation and it has now been finalized based on comments from various stakeholders.
According to an official statement, India is one of the fastest growing markets of electronics in the world. There is potential to develop the Electronic System and Design and Manufacturing (ESDM) sector to meet our domestic demand as well as to use the capabilities so created to successfully export ESDM products from the country. The National Policy on Electronics aims to address the issue with the explicit goal of transforming India into a premier ESDM hub.
The strategies include setting up of a National Electronics Mission with industry participation and renaming the Department of Information Technology as Department of Electronics and Information Technology (Deity). The Department has since been renamed on February 26, 2012.
The statement said that the policy is expected to create an indigenous manufacturing eco-system for electronics in the country. It will foster the manufacturing of indigenously designed and manufactured chips creating a more cyber secure ecosystem in the country. It will enable India to tap the great economic potential that this knowledge sector offers. The increased development and manufacturing in the sector will lead to greater economic growth through more manufacturing and consequently greater employment in the sector.
The policy envisages that a turnover of USD 400 billion will create an employment for two million people.
ESDM is of strategic importance as well. Not only in internal security and defence, the pervasive deployment of electronics in civilian domains such as telecom, power, railways, civil aviation, etc. can have serious consequences of disruption of service. This renders tremendous strategic importance to the sector. The country, therefore, cannot be totally dependent on imported electronic components and products.
The key objectives of the policy are:
(i) To create an eco-system for a globally competitive Electronic System Design and Manufacturing (ESDM) sector in the country to achieve a turnover of about USD 400 billion by 2020 involving investment of about USD 100 billion and employment to around 28 million people at various levels.
(ii) To build on the emerging chip design and embedded software industry to achieve global leadership in Very Large Scale Integration (VLSI), chip design and other frontier technical areas and to achieve a turnover of USD 55 billion by 2020.
(iii) To build a strong supply chain of raw materials, parts and electronic components to raise the indigenous availability of these inputs from the present 20-25 per cent to over 60 per cent by 2020.
(iv) To increase the export in ESDM sector from USD 5.5 billion to USD 80 billion by 2020.
(v) To significantly enhance availability of skilled manpower in the ESDM sector. Special focus for augmenting postgraduate education and to produce about 2500 PhDs annually by 2020.
(vi) To create an institutional mechanism for developing and mandating standards and certification for electronic products and services to strengthen quality assessment infrastructure nationwide.
(vii) To develop an appropriate security ecosystem in ESDM.
(viii) To create long-term partnerships between ESDM and strategic and core infrastructure sectors - Defence, Atomic Energy, Space, Railways, Power, Telecommunications, etc.
(ix) To become a global leader in creating Intellectual Property (IP) in the ESDM sector by increasing fund flow for R and D, seed capital and venture capital for start-ups in the ESDM and nanoelectronics sectors.
(x) To develop core competencies in strategic and core infrastructure sectors like telecommunications, automotive, avionics, industrial, medical, solar, Information and Broadcasting, Railways, etc through use of ESDM in these sectors.
(xi) To use technology to develop electronic products catering to domestic needs, including rural needs and conditions, as well as international needs at affordable price points.
(xii) To become a global leader in the Electronic Manufacturing Services (EMS) segment by promoting progressive higher value addition in manufacturing and product development.
(xiii) To expedite adoption of best practices in e-waste management.
(xiv) To source, stockpile and promote indigenous exploration and mining of rare earth metals required for manufacture of electronic components.
To achieve these objectives, the policy proposes the following strategies:
(i) Creating eco-system for globally competitive ESDM sector: The strategies include provision of fiscal incentives for investment, setting up of electronic manufacturing clusters, preferential market access to domestically manufactured electronic products, setting up of semiconductor wafer fabrication facilities, industry friendly and stable tax regime. Based on Cabinet approval, a high level Empowered committee has been constituted to identify and shortlist technology and investors for setting up two semiconductor wafer manufacturing fabrication facilities. Based on another Cabinet approval a policy for providing preference to domestically manufactured electronic goods has been announced. Separate proposals have also been considered by the Cabinet for approval of Modified Special Incentive Package for the ESDM Sector and for setting up of Electronics Manufacturing Clusters (EMCs).
(ii) Promotion of Exports: The strategies include aggressive marketing of India as an investment destination and providing incentives for export,
(iii) Human Resource Development: The strategies include involvement of private sector, universities and institutions of learning for scaling up of requisite capacities at all levels for the projected manpower demand. A specialized Institute for semiconductor chip design is also proposed.
(iv) Developing and mandating standards to curb inflow of sub-standard and unsafe electronic products by mandating technical and safety standards which conform to international standards.
(v) Cyber security: To create a complete secure cyber eco-system in the country, through suitable design and development of indigenous appropriate products through frontier technology/product oriented research, testing and validation of security of products.
(vi) Strategic electronics: The strategies include creating long-term partnerships between domestic ESDM industry and strategic sectors for sourcing products domestically and providing Defense Offset obligations for electronic procurements through ESDM products.
(vii) Creating ecosystem for vibrant innovation and R and D in the ESDM sector including nanoelectronics. The strategy includes creation of an Electronic Development Fund.
(viii) Electronics in other sectors: The strategy includes supporting and : developing expertise in the electronics in the following sectors of economy: automotive, avionics, Light Emitting Diodes (LEDs), Industrial, medical, solar photovoltaics, Information and Broadcasting, Telecommunications, Railways, Intelligent Transport Systems, and Games and Toys.
(ix) Handling e-waste: The strategy includes various initiatives to facilitate environment friendly e-waste handling policies. (ANI)

I remember Steve Job's Iphone presentation when he quoted a person who said that software people should build their own hardware.

Its a mix that will give us an edge over others. Another thing is collaboration with foreign hardware giants to build local industries.

Yup foreign companies are welcomed under this policy.

 

[cirr]

Land acquisition could prove to be a big problem for India。

In China all lands are owned by the State，thereby putting （all levels of）governments in a strong position to provide various incentives，including low-interest loans and free use of lands（for a stipulated number of years），the sizes of which often reach tens of millions of square metres for large manufacturing clusters。

 

[zaxcolix]

Land acquisition could prove to be a big problem for India。

In China all lands are owned by the State，thereby putting （all levels of）governments in a strong position to provide various incentives，including low-interest loans and free use of lands（for a stipulated number of years），the sizes of which often reach tens of millions of square metres for large manufacturing clusters。

There are multiple private and public owned SEZ's in India. This would be something similar to SEZ's. Private players would buy up land to for this new HUB.

 

[RISING SUN]

We should make sure that this policy will get success only when we provide enough compensation,jobs & equal opportunistic to our citizens. BTW I liked the line of the I-Phone comment.

 

[cirr]

There are multiple private and public owned SEZ's in India. This would be something similar to SEZ's. Private players would buy up land to for this new HUB.

Can private players buy up a whole city that's tens of kilometers squares in size？

My point is that in order to make a manufacturing cluster efficient and competitive，you need to achieve a certain size that is enough to house not hundreds，nor thousands，but tens of thousands of companies of all stocks。

Then you need first class infrastructure，soft and hard， including customs house、bonded tax area、special tax policies，logistics、railroads、expressways、ports、airports，etc，etc。，plus dedicated government branches serving the cluster in question on site to rid of all the red-tapes。