“ This is the right time for the industry to come forward and enjoy the fruits of the government’s initiatives”

Dr. Rai
Dr Omkar Rai, director general, STPI

Software Technology Parks of India (STPI) aims to facilitate the electronic system design and manufacturing (ESDM) sector in the country to move up the value chain. In a conversation with Sudeshna Das, senior executive editor, Electronics Bazaar, Dr Omkar Rai, director general, STPI, spoke about the journey of STPI, the initiatives taken by it to promote ESDM, as well as his vision for the future of this sector.

EB: How did STPI begin its journey?
How STPI began is a very interesting case. In fact, how STPI was created by some extremely talented visionaries would make a very good case study for researchers.
STPI was conceptualised in 1986 by the then Department of Electronics. At that point of time, nobody had really thought about the possibility of outsourcing IT services, or how exports in this sector would be possible. For example, customs officers could allow the physical export of goods, but how would they allow the export of bytes and bits, 0 and 1—the binary digits. If you go back to 1986 and look at the world then, this was quite unimaginable. But some extremely talented people managed to do what had not even been imagined till then.
They dreamt about a huge, successful upcoming industry, built on the information technology outsourcing model, and created the frameworks for the legal, operational and business processes involved in it. Those frameworks are relevant till date. Finally, they came up with a scheme in 1986 for the promotion of software development and exports, along with a skills development resolution, and that was published in the Gazette of India. As a follow-up action, three STPs were created in 1989. But in 1991, all three STPs were merged to create a single entity, the Software Technology Parks of India.

EB: How were the early days for STPI?
Initially, it was thought that STPI would provide the infrastructural support, and heavy computing machines would be put in place so that people could compute. Personal computers (PC) had not yet arrived on the scene, and the huge servers required approximately 1000 square metres of space to set up a computer centre, and process the same data that we process today with the help of a single PC.
In the 90s, there was no bandwidth to provide the connectivity. Therefore, STPI was created as a licensee to run satellite based Internet gateways. After that, as and when things started developing, other challenges also started coming up, so the Department of Electronics started framing the rules, while creating the infrastructure and support.
This was a true revolution, which created a new industrial sector and changed the country. In the case of other similar revolutions, like those in the agriculture and milk sectors, the sectors already existed and systems were created or revamped. But the IT revolution happened entirely based on a dream, and the entire model was created. There is no other success story like this, and I believe that STPI should take pride in highlighting this – it is the greatest service that STPI has been doing to this country.

EB: How does STPI support the industry today?
Way back in 1991, STPI was created as a nodal agency to promote software development, hardware manufacturing, and the export of both. STPI has been providing statutory services under a ‘single window clearance’ mechanism from various STPI centres spread across the country, right since its inception.
Apart from that, STPI was also entrusted to provide the IT industry with incubation support and Internet bandwidth support. It was licensed to provide bandwidth services to the IT exporter and the IT industry, as a whole. Therefore, each STPI centre became an international satellite gateway, offering Internet bandwidth to the IT industry.
So, basically, apart from being a single window support and clearance authority for IT exports, we were also into infrastructure and other necessary support to the IT industry.
Software Technology Parks of India was established and registered as an autonomous society under the Societies Registration Act 1860, under the then Department of Electronics (the present Department of Electronics & Information Technology or DeitY), Ministry of Communications and Information Technology, government of India, on June 5, 1991.
The STPI aims to:

  • Promote the development and export of software and software services, including IT enabled services/Bio-IT.
  • Provide statutory and other promotional services to the exporters by implementing software technology parks (STP) and electronics and hardware technology park (EHTP) schemes, as well as other such programmes that may be formulated and entrusted to it by the government, from time to time.
  • Provide data communication services including value added services to IT/IT enabled services (ITES) related industries.
  • Promote micro, small and medium entrepreneurs by creating a conducive environment for entrepreneurship in the field of IT/ITES.

EB: How does STPI facilitate the electronics hardware sector in India?
STPI actually focuses on both the software and hardware sectors but, incidentally, the software sector did well and electronics manufacturing could not take off. We have been sourcing most of the electronics and hardware items from other ASEAN countries, and India has become a victim of these imports.
In the year 2012, the government of India created a National Policy on Electronics and, as a follow up, the Ministry of Communications and Information Technology and the Department of Electronics and IT, particularly, started formulating and implementing schemes like MSIPS (Modified Special Incentive Package Scheme), Electronic Manufacturing Clusters, Electronic Development Fund, etc, to promote the electronics sector.
But STPI has taken a totally different approach. As mentioned earlier, we promote and administer the EHTP scheme. This is a 100 per cent export-oriented scheme, but it has a component of local manufacturing in terms of Domestic Tariff Area (DTA) permissions. Under this scheme, the export-oriented companies are allowed to do 50 per cent DTA business. So, they can include the element of local manufacturing and local marketing too.
Today, the focus in India, in the field of electronics, is more on domestic production than on exports. So, STPI is not only continuing to support the software sector but also nurturing the ESDM sector, by filling the gaps wherever they exist.
To start with, we have tried to ensure that indigenous companies develop products in this country. Therefore, for the first time in India, with the support of DeitY and in partnership with Delhi University and the India Electronic Semiconductor Association (IESA), STPI has established an Electropreneur Park in the South Campus of Delhi University. The park has been conceived to place emphasis on the development of products and on IP creation in the ESDM sector, especially for the six mass-consumption electronics products that CAREL (Committee for Advancing Research in Electronics) has identified.
The idea is that we should be able to identify, select and fund 50 entrepreneurs and host them in Electropreneur Park, which has been developed to meet the entire requirements of entrepreneurs in the ESDM sector.
So, every year, we will select 10 entrepreneurs through a specific selection process and will host them in this park. DeitY has allocated around ₹ 230 million for this initiative. We are managing and implementing this scheme. IESA and Delhi University are supporting us to ensure that there is the necessary industry and academia interface.
We are also working with other state governments like Orissa and Maharashtra, so that the Electropreneur Park project can be replicated in other places too, to support some startup companies and entrepreneurs in the field of ESDM.
We have taken up another initiative to facilitate electronics chip design. India is doing very well in the field of electronics design, and we design a lot of chips. But we realised that there is a gap in terms of the availability of design testing labs and, therefore, the chip designers have been sending the chips they design to Taiwan, China and the US for quality and reliability testing. So, for the first time, in partnership with the government of Karnataka, STPI has established a chip characterisation lab in Bengaluru. This is totally operational. We are going to set up another lab in Bhubaneswar, again in collaboration with the government of Orissa. This would basically complement the lab we have in Bengaluru. So, we are trying to support the entire ecosystem of chip design so that the turnaround time, testing time and overall testing costs can be reduced to the minimum.

EB: What are the criteria for selecting entrepreneurs for the Electropreneur Park?
The government will not play any role in the selection process, and it will be totally driven by a group of advisors. We will consider only the entrepreneurs who are planning to manufacture products identified by CAREL, which are required for this country. The board of advisors comprises pioneers of this industry. Their integrity, interest and experience will help us to select the right entrepreneur.
We are educating people about this initiative across the country by holding road shows, and meeting young entrepreneurs. We are trying to counsel them and make them aware about this project. All this will help us to get the best set of entrepreneurs.

EB: What is your message for the ESDM industry?
I would say that, so far, we have come up to a level we can be proud of in the field of software and IT. We are the champions, the leaders in the entire world, and we have also moved up the value chain. The capability of Indians is also well-proven in the field of electronics design. We excel and are leaders in this field too.
Now, only manufacturing remains a challenge. For manufacturing excellence, we need to develop IPRs and intellectual wealth in terms of patents and products. At STPI, we are supporting product development through startup entrepreneurship programmes. I would say that the industry has to venture out, and take the initiative to enjoy the benefits of the schemes that the government of India has offered to those entering electronics manufacturing. In the times to come, the measures the government has taken are going to make a lot of difference. For example, once the GST is implemented, the movement of goods is going to be much simpler and faster, and the cost of transactions will come down drastically.
So, I am very optimistic that this is the right time for the industry to come forward and enjoy the fruits of the government’s initiatives. This should start today, because new entrants will be on time to reap these benefits and get into manufacturing.
There is bound to be a huge increase in the domestic consumption of electronic components, products and services due to the Indian government’s policies to ensure procurement preferences for Indian companies that get into partnership with foreign firms. However, we are still importing electronic products, and hence are at a very disadvantageous position.
Under digitial India initiative, a stress has been laid on the indigenous production of hardware and software. This would help India in achieving a great sucess in its make in India and startup India initiatives.

Six mass-consumption electronic
products identified by CAREL
Segments Products
 Consumer electronics  Set-top boxes
Telecom  Smartphones
 Education  Electronic products for education, e-governance, service delivery (with a focus on tablets)
 Energy  Smart energy meters
 Identification  Smart cards
 Financial services  Micro ATMs