“Electronics industry in India has a long way to go to compete with other countries”

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All India Radio and Electronics Association (AIREA) promotes and protects the interests of the electronics industry including manufacturers, importers, exporters, distributors, wholesale and retail dealers and those involved in the sale, repair, servicing, insurance or hiring of radios, televisions and other wireless electronics goods. In an interview, Nayan Parekh, secretary, AIREA (WZ), explains to Srabani Sen of Electronic Bazaar, the role it plays to boost the electronics industry in the west zone.

EB: How has the Indian electronics manufacturing and trade industry grown over the last couple of years? Is the growth as per your expectations?

The Indian manufacturing and trade industry has grown very well over the last few years. However, we still have a long way to go to be competitive with large manufacturing based countries like China, Taiwan, Korea, Japan, etc. Even a small country like Thailand, due to its FTA advantage and better infrastructure, has been very competitive. Trade can benefit if the policies of the central and state governments are more transparent and hassle free.

EB: What are the problems being faced by the Indian electronics manufacturing and trade industry, currently?

Currently, Indian manufacturers and traders face many challenges. Poor Infrastructure at all levels like ports, airports, roads, etc, add immensely to the inefficiencies. The high cost of funds is also a major issue for all. The bureaucracy is another challenge we need to overcome. There is too much paperwork at government departments and the ‘Inspector raj’ is still prevalent in almost all government departments.

The high level of taxation—at the central, state and local level—are adding tremendously to costs and the accompanying paperwork, which, in turn, adds to inefficiency when compared to other countries. Issues like road permits, entry taxes, octroi, etc, lead to delays and heavy overheads, and finally increase the cost of transportation.

EB: What are the possible solutions to these problems?

The most important solution will be the introduction of a tax structure like the goods and service tax (GST), encompassing all central, state and local taxes. Efforts should also be made to reduce paperwork and encourage entrepreneurship.

EB: What is AIREA doing to promote manufacturing in India?

AIREA provides a platform for reliable and reputed suppliers and manufacturers. We help put forward the manufacturers’ problems to the government through various forums. AIREA helps various trade fairs in promoting their events.

EB: What other role does AIREA play in the electronics industry?

AIREA provides a common platform for trade in the electronics industry. Members of AIREA are in sectors like consumer durables, industrial, telecom, and strategic electronics like defence, railways, etc. AIREA helps in promoting these industries through various government and trade channels.

It also promotes or opposes the legislative measures affecting the industry. AIREA arranges and provides facilities for conferences, exhibitions, demonstrations, lectures, excursions and other functions relating to the industry.

EB: Is AIREA currently working with the government on any project?

AIREA is working towards tax reductions of various kinds in order to promote and boost the electronics industry, which is burdened heavily by various taxes, and on the other hand, faces competition from foreign suppliers who operate under a low tax structure, with a low cost of funds and far better infrastructure. AIREA is also helping traders to promote their products though various government programmes.

EB: How can we score over China in terms of manufacturing?

To compete with China, we first need to overcome our limitations on the domestic front. Also, we need to be more innovative; our goods should match international standards; we need to give better after sales service and better product documentation, to score over China.

EB: How do you safeguard the interests of the electronics trade and manufacturing industry?

We take up various issues with government agencies to solve the problems of the traders and manufacturers. We conduct talks and seminars that are led by eminent experts in the field of taxation, customs and excise and also in technical areas for the benefit of our members. We also hold awareness campaigns and circulate relevant information in the form of DVDs and printed material to educate our members.

EB: Can you mention some of the achievements of AIREA in the recent past?

AIREA worked closely with the sales tax department to ensure taxes on various components are applied uniformly. This was implemented successfully by the sales tax department in Maharashtra. AIREA has also brought together more than 300 members to work towards a common cause. It also contributes, monetarily and materially to various national and social causes.

EB: How is the electronics industry doing in the west zone? What are its strong and weak points?

The electronics industry in the west zone mainly comprises companies dealing in consumer electronics, automation and automotive electronics, industrial instrumentation, electronics surveillance and security, power electronics, telecom and LED lights. The industry also includes sectors like elevator manufacturers, machine tool manufacturers, textile and plastic machine producers, etc, who all have a large input of electronics.

This industry is respected for its quality, long term reliability, and of course, its commitment. However, it has lost out on the consumer electronics business, which is a very large part of the electronics industry. The west zone has also failed to attract various multinationals due to various reasons like poor infrastructure, high land costs, presence of octroi, high labour and power costs, and too much of the ‘Inspector raj’ in government departments. These companies have, therefore, moved to the NCR, Bengaluru and Chennai.

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