Unleashing new opportunities for electronics industry

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By Sandhya Malhotra

EFY Enterprises organised the EFY Summit 2009, a first of its kind event, where leaders from the Indian electronics industry gathered under a single roof at Le Meridien, New Delhi, on December 16, 2009. The consensus reached by the panelists was that the Indian electronics industry has tremendous opportunity for growth, and therefore the need of the hour is for the government and the industry to work hand-in-hand for the growth of the industry.

The introductory address by Ramesh Chopra, managing director, EFY Enterprises, and keynote address by R Chandrashekhar, secretary, department of information technology, Government of India, aptly captured the flavour of the summit—’Unleashing New Opportunities for the Electronics Industry’.

Taking the subject forward, panelists representing a vast range of verticals, brought forth an insight into the varied developments, highlighted the contemporary issues and opportunities for Indian electronics industry, and shared solutions and take away strategies with the audience. The industry not only discovered ‘where’ and ‘how’ to expand business but also the untapped markets and product segments. The summit helped identify actions that can change the industry’s fortunes.

The entire panel discussion was designed to help senior business decision makers in unleashing new opportunities and figuring out strategies for tapping them. The summit was divided into four sessions—Emerging Markets in India: The Untapped and Upcoming Business; Made in India: Design Challenges and Innovativeness; The Electronics Eco-systems in India: A Bird’s Eye View; and How and Where to Get Funding and Finance. Panel speakers represented the government of India and companies like Cadence Design Systems, Reliance Industries, IMRB International, Regnant, IIT Delhi, Bharat Electronics, Su-Kam Power Systems, Aplab, Juki India, Amara Raja, SanShadow Consultants, ICT Consultant and Religare.

India needs to set benchmark

Addressing the electronics fraternity, Ramesh Chopra put forth some important questions and gave food for thought. “Can India afford to continue importing electronics goods? Should India not go in for manufacturing of electronics goods in a big way like China? Why don’t we become designers and service providers for the world?” he asked. “It seems clear to me that if we can make India a great manufacturing hub, we shall be able to generate more employment and opportunities, specially for those who are not well educated and people from villages and small towns. India needs to set a benchmark to succeed. Who knows, a day may soon come when India becomes a benchmark for the whole world. Of course, for that we shall have to work hard relentlessly,” he emphasised.

Agreeing to Chopra’s views, R Chandrashekhar said that the government has now seriously decided to encourage local manufacturing of electronics goods. “A report submitted by the Task Force Committee on December 11, 2009, has reflected that it’s no longer a government vs industry situation, and that the time has come when the government needs to work together with the industry for its growth.” Appreciating the summit for its topical theme, Chandershekhar said, “On the IT/ITES front we have already achieved successes but current emphasis is on how to extend the success to the electronics sector. This is a recognition of the importance of electronics sector in the country and, unlike the software and services sector, here success means meeting our own rising and exploding demand. High growth has been projected for the electronics sector in the next few years.”

Chandrashekhar said the question is whether this exploding demand will be met substantially by imports, or will it lead to an opportunity for domestic manufacturing. The government has now realised that it can no longer set up expectations for the industry and is ready to work hand-in-hand with the industry to meet the demand. He put forth the advantages of having local manufacturing as India has the expertise in innovative design and products, R&D capabilities and the demographic advantage of a large youth population.

Opening the floor to the panel discussion, Chandrashekhar concluded, “This will create huge employment opportunities. Currently, the electronics industry employs around 4.4 million people. This number is expected to grow to 16.1 million in 2014 and 27.8 million in 2020.”

Session 1: Emerging markets in India—The untapped and upcoming business

Jaswinder Ahuja, corporate vice president and managing director, Cadence Design Systems, India, was the first to speak. During his presentation he pointed out that 4G phones, smart grid power, medical electronics, video and solar will drive the growth of the electronics industry. “From $45 billion in 2009, the domestic demand will increase to $125 billion by 2014— a rise of 22 per cent annually. “India offers huge headroom to grow and exploit the untapped opportunities,” he said.

Gurjit S Bharara, business head, solar group, Reliance Industries Ltd, provided yet another perspective as he pointed out that solar was an emerging market, with India holding 89,000 TW potential. He said the government has promised 20,000 MW of solar power by 2022 under the Solar Mission, extending financial support worth Rs 900 billion to realise it. “Moreover, there is a huge demand for grid connected solar plants to illuminate Indian villages. India will become $75 billion solar market by 2022,” he said.

PK Sood, chairman, Regnant Group of Companies, raised another important point—“India has untapped opportunities in power electronics for lighting and renewable energy applications—but is India prepared for this?” According to ELCOMA, the Indian lighting industry is worth Rs 50 billion, registering a growth of 18-19 per cent in 2009. CFL has been the fastest growing segment, with at an estimated growth of 25-28 per cent every year. India consumes around 200 million units of CFL yearly, while only about 150 million units are produced locally, the rest are imported. Sood emphasised the need for interacting more frequently with policy to makers where government intervention is necessary, absorb and initiate new ideas.

Mohan Krishnan, senior vice president, IMRB International, said, “India is a low income country, and requires a quantum growth rate to emerge as high income country. India’s urbanisation is increasing and rural household income is also on the rise. By year 2014, India will be a very interesting market for many digital gadgets.” Krishnan also sees significant growth opportunities in security devices, medical electronics and education sectors.

Session 2: Made in India—Design challenges and innovativeness

While initiating the topic, Debashis Dutta, senior director, DIT, briefly touched upon the overview of the Indian semiconductor design sector. “India is involved in end-to-end design activities ranging from chip architecture, development, design verification and layout, all the way to design tape out. India is aligning itself with the global semiconductor market by creating high value work in VLSI and board design and embedded software,” he said.

Lalit Kumar Das, head IDDC coordinate, industrial design, IIT Delhi, pointed out that the corporate culture is at the core of innovation. He put across the idea to develop an online Wiki-EFY design culture community to bring forth new innovative designs for the electronics industry.

Adding more to the basics of product design, Philip Jacob, general manager-central, development and engineering, Bharat Electronics Ltd, explained the complete cycle starting from product selection, manufacturing, marketing and profitability in a very vivid and precise way. The session ended on a lighter note by Kunwer Sachdev, founder and managing director, Su-Kam Power systems Ltd. He stressed that India has immense potential in terms of innovation. Narrating his success story of building Su-Kam from scratch, Sachdev pointed out that R&D and innovation can play a major role in the growth of the electronics industry.

Session 3: The electronics ecosystem in India—A bird’s eye view

While giving a background of the electronics industry, Neelam Kumar, executive director, Aplab Ltd, said, “The ecosystem analogy helps electronics companies understand the need for interaction, probe new opportunities and achieve rapid and sustainable growth. India’s capability in developing competitive products, especially telecom, industrial electronics and computers, has been recognised globally. But unfortunately, India still lags behind in the global market.”

She emphasised that there is a requirement to upgrade industrial technology base to make India a hub of modern manufacturing. “Enhancing efficiency and accountability requires development of holistic solutions, and we have to collectively represent and influence the government to change the taxation regime,” she said.

N Chandramohan, country head-SMT, Juki India, raised another concern. Will Indian electronics manufacturing live up to the expectations? “Yes, provided the industry becomes competitive and the government keeps an eye on the imports to encourage local manufacturing.”

On the other hand, Indeevar G, GM, sales and marketing, Amara Raja Electronics Ltd, was confident that India can surpass China as a hub for consumer durables. “ASSOCHAM and Ernst & Young , in a joint study, have projected that India’s electronics and appliances industry will reach $40 billion by 2012 with a CAGR of 11 per cent,” he pointed out.

Dr Shaleen Raizada, MD and CEO, SanShadow Consultants Pvt Ltd, enlightened the gathering on the importance of intellectual property (IP) rights for electronic organisation. She said if an companies has a bargaining IP portfolio, is using technology in public domain and has increased valuation using IP during funding, then understanding IP is very important for the company.

Session 4: How and where to get funding and finance

This session was very informative and useful for the micro, small and medium enterprises, looking for funds to start projects. Dr PK Dutta, scientist–E, department of science and industrial research (DSIR), introduced DSIR’s Technopreneur Promotion Programme (TePP) that promotes innovation through financial support for R&D, design engineering, scientific or technical consultancy.

While Arun Kumar Jha, director, MSME, government of India, highlighted various government schemes, Rahul Gangal, senior vice president, defence advisory services, Religare Capital Markets, and P Venkatram, ICT consultant, spoke about ways of getting funds and finances from the government and banks.

The summit was concluded by Siva Koka, senior consultant-editorial and industry interface, EFY Enterprises, who gave the vote of thanks. Later prizes were given out to some lucky winners from the audience. The electronics fraternity unanimously appreciated the timeliness and the contemporary theme of the summit and hoped that many such meaningful summits would be organised by EFY Enterprises in future.

EFY EXPO 2011 in Delhi

With an aim to sensitise the stakeholders in the Indian electronics industry on the widening gap in demand and supply of electronics products and growing dependency on imports to fulfil domestic demand, EFY Enterprises Ltd. will organise an Electronics Expo at Pragati Maidan, New Delhi, in February 2011.

The demand-supply gap in electronics, currently pegged at $25 billion, is expected to increase to $298 billion by 2020. Therefore, it is critical for the Indian electronics industry to accelerate its growth. As India’s No.1 magazine for the electronics industry, Electronics For You has taken it upon itself to catalyse this growth. In the process, EFY Enterprises held the EFY Summit in December 2009 and plans to organise more such events in 2010 as well.

The objective of EFY Expo 2011 is to act as a comprehensive resource for the electronics industry, with an emphasis on the challenges faced by the industry in setting up new ventures or trying to take them to the next level. The expo will expose the participants to emerging business areas like solar and LED, and how they can diversify their business to these untapped areas to fill a huge demand-supply gap.

The event will also offer a great opportunity for participating companies to showcase their latest products to a mix of potential buyers, prominent electronic companies, equipment manufacturers and vendors and channel partners. Besides this, the expo will offer participants the opportunity to network, learn about new technologies and exchange ideas on the latest industry trends. As the event guarantees fabulous opportunity to reach out to maximum number of electronics professionals under one roof, the participants can enhance their revenue streams and increase profits.

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