“JVs with global partners will help Bengaluru’s electronics industry to leapfrog”

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In a conversation with Nitasha Chawla of Electronics Bazaar, Uma Reddy, past president of CLIK (Consortium of Electronics Industries of Karnataka) and chairperson of an ESDM cluster being set up in Bengaluru, talks about the state’s electronics industry, its growth prospects and the challenges it faces

EB: What is the current scenario in Bengaluru’s electronics industry?

Electronics plays a key role since it pervades all major sectors like defence, automotive, medical, engineering, etc. So there will always be a demand for electronics. Even if one sector is in a slump, there will be another in which the demand for electronics remains high. So, I would say that at present, the demand for electronics is good in Bengaluru. For small enterprises catering to the electronics industries, there are great opportunities here in the area of sub-assemblies, embedded systems, components, mechatronics and software-hardware integrated modules.

EB: What are the regional trends in this domain?

We are witnessing a growing shift towards miniaturisation and automation. There has also been growing awareness about green manufacturing, use of renewable energy (solar) as well as the need for higher efficiency. In electronics, there has been a demand for the adoption of RoHS and REACH compliance, respectively.

EB: What are the strengths and weaknesses of the city?

I think that the strength of the city lies in its integration of the hardware sector with the IT sector. Bengaluru being the hub for hardware electronics manufacturing since over five decades, we have a number of MSMEs in electronic components, embedded systems, telecom products, etc evolving in the city, and adding value together with the software integration. The city has to cash in on this opportunity to utilise its skills in both software and hardware development.

However, despite so much development, the city has failed to provide the required infrastructure to the industry. Everything, from transportation systems to high power costs, is a major challenge for companies that wish to set up their units in Bengaluru. Also, the electronics industry in the city is facing tough competition from Chinese, Taiwanese and Korean companies. It is not easy for companies to take up manufacturing of components because we have never had the environment and capacities to support manufacturing, and they don’t exist even now—compared to what China, Taiwan and Korea offer to their manufacturing enterprises.

EB: What role does CLIK play in assisting the electronics industry in Bengaluru?

CLIK supports clusters. We believe that there are more opportunities when you work together as a group. When companies come together as a group, there are common facilities and infrastructure for certain activities so that companies don’t have to invest individually. We are in the process of setting up an electronics systems and design manufacturing (ESDM) cluster. The clusters formed by CLIK provide a common R&D centre, business incubation centre, and a test and calibration centre that can support SMEs.

EB: Does Bengaluru have the potential to become an electronics manufacturing hub in the coming years?

Bengaluru has been home to many electronics public sector units (PSUs) like Bharat Electronics Limited (BEL) and Bharat Heavy Electronics Limited (BHEL) since the 1960s. Due to this, the city gave birth to many ancillary SME units that started supplying to these PSUs. This is one of the reasons behind Bengaluru becoming a manufacturing hub and it continues to be one even now. I would say that Bengaluru definitely has the potential to become a hub since it has a history of success behind it.

EB: Which are the strong market-driven sectors in Bengaluru?

Solar PV and LED products have a huge potential. We are seeing greater use of solar energy in components, batteries, lights, etc. Even though the initial costs of using solar energy are high, we can think of methods or technologies to reduce these costs and benefit from its use. However, sectors like medical electronics, aviation, telecom, defence, also offer a lot of opportunities for the SMEs.

EB: How did state government help in making Bengaluru a hardware manufacturing hub?

The state government has been very proactive in supporting the electronics industry and taking up initiatives for its growth. It has extended support to our ESDM cluster and the industry is now hoping to see it getting implemented.

EB: What are the major challenges faced by the manufacturers in Bengaluru?

Talking about SMEs in particular, they are facing issues such as cost of finance, access to new technologies, and lack of R&D centres. I think it is high time we start having more joint ventures (JVs) with global partners from Germany, Taiwan and Korea to benefit from their expertise. This would definitely help the industry to leapfrog.

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