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Time to become Atmanirbhar in Electronic manufacturing – India

Time to become Atmanirbhar in Electronic manufacturing - India

UPSC CSE Mains Syllabus: GS-3- Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

In news:

In the wake of the developments at the Line of Actual Control that separates India and China, India has serious reservations about deploying Chinese equipment in its telecom infrastructure.

At the same time, American sanctions against Huawei, denial of chips made on machinery supplied by American companies, makes it clear that the idea of some kind of global technological commons is an illusion.

For a country like India that seeks an autonomous geopolitical role for itself, the implication is that it must have the technological nous(common sense; practical intelligence) in all advanced areas to be truly Aatmanirbhar, self-reliant. 

Microelectronics, a sector that is controlled by a handful of companies across the globe, is an area in which India potentially has the capability and opportunity to become an autonomous global power and to offer competition to virtual monopolies.

Microelectronics:

  • Microelectronics is a subdivision of the field of electronics that deals with very small and microscopic elements to manufacture electronic components.
  • Microelectronics has been rapidly evolving as the most in-demand field of electronicsbecause of the ever-increasing demand for inexpensive and lightweight equipment.
  • Semiconductor material such as siliconand graphite are the most commonly used elements in the manufacturing of microelectronic devices.
  • These include transistors, capacitors, inductors, resistors and diodes as well as insulators and conductors.
  • Equipmentand expertise used in manufacturing of microelectronic devices is not widely available, causing microelectronic devices to generally be more expensive than devices that do not utilize microelectronics.

Indian semiconductor industry:

  • The Indian semiconductor industry offers high growth potentialareas as the industries which source semiconductors as inputs are themselves witnessing high demand.
  • The end-use industries such as mobile devices, telecommunication equipment, information technology, office automation (IT & OA), industrial machinery, automobilesand several other industries have applications for computing in some form or other and thereby necessarily have growing demand for semiconductors.
  • Now with the concept of Internet of Things (IoT)picking up momentum, the next generation of interconnected devices would further increase the demand for intelligent computing, thereby creating sustainable demand for semiconductors.
  • India has a very fast growing electronics system design manufacturing (ESDM) industry.
  • India also has a strong design base with more than 120 units.
  • According to the Department of Electronics and Information Technology (DeitY), nearly 2,000 chips are being designed every yearin India and more than 20,000 engineers are working on various aspects of chip design and verification.
  • The government has a strong focus in developing the ESDM ecosystem in India.
  • Several subsidies and other incentives are on offer for setting up electronics manufacturing units in India.
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What is needed:

  • India must focus on backward integrationthat is not just making electronics assembly and microchips but also making the instrumentation, software and machines that make manufacturing microelectronics possible. This is a sector that is virtually the monopoly of a handful of global companies, and the instrumentation and machinery for microelectronics is the monopoly of even smaller group of companies.
  • Microelectronics and microchips are ubiquitous.
  • India has the advantage of trained human resource.
  • What is required is a plan that will help build up the microelectronic manufacturing through its entire value chain.
  • The use of microelectronics will clearly increase with greater automation, increased need for tracking.
  • This is a growth sector and India should be able to take advantage of this.
  • In doing so, it will not only create economic activity within the country and diversify supply chains, but also provide competition.
  • India needs to focus its efforts on areas where it has some built-in advantageYoung, energetic, low-cost engineering manpoweris an advantage.
  • The challenge is to amass them with motivation, definite goals and sufficient funding. This is where some new public enterprises should step in.
India’s electronics production has increased from Rs. 1,90,366 crore (US$29 billion) in 2014-15 to Rs. 4,58,006 (US$ 70 billion) in 2018-19, at a Compound Annual Growth Rate (CAGR) of about 25%.  India’s share in global electronics manufacturing grew from 1.3% (2012) to 3.0% (2018).  It accounts jfor 2.3% of India’s GDP at present. 
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Modified Electronics Manufacturing Clusters (EMC2.0) Scheme:

India has already approved financial assistance to the Modified Electronics Manufacturing Clusters (EMC2.0) Scheme for development of world class infrastructure along with common facilities and amenities through Electronics Manufacturing Clusters (EMCs). 

It is expected that these EMCs would aid the growth of the Electronic System and Design Manufacturing (ESDM sector), help development of entrepreneurial ecosystem, drive innovation and catalyze the economic growth of the region by attracting investments in the sector, increasing employment opportunities and tax revenues.

Necessary Conditions:

  1. The Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme would support setting up of both Electronics Manufacturing Clusters (EMCs) and Common Facility Centers (CFCs). 
  2. For the purpose of this Scheme, an Electronics Manufacturing Cluster (EMC) would set up in geographical areas of certain minimum extent, preferably contiguous, where the focus is on development of basic infrastructure, amenities and other common facilities for the ESDM units. 
  3. For Common Facility Centre (CFC), there should be a significant number of existing ESDM units located in the areaand the focus is on upgrading common technical infrastructure and providing common facilities for the ESDM units in such EMCs, Industrial

Benefits

           Following are the expected outputs/outcomes for the Scheme:

  1. Availability of ready infrastructure and Plug & Play facility for attracting investment in electronics sector:
  2. New investment in electronics sector
  • Jobs created by the manufacturing units;
  1. Revenue in the form of taxes paid by the manufacturing units

Source:” Economic Times“.

POSSIBLE UPSC CSE MAINS QUESTION:

The time has come for India to shed its dependency on electronics manufacturing and become Atmanirbhar. Elaborate.