Karnataka MSMEs to capture 20 per cent of $400 billion in electronics manufacturing


January 16, 2015: The electronics city MSME cluster in Bengaluru has received Rs 120 million from Central and state governments in order to design and manufacture electronic products.

The annual demand across India from the present US$ 71 billion is expected to reach US$ 400 billion by the year 2020 in the electronics systems design and manufacturing (ESDM) sector. On the same lines, a cluster formed by Micro, Small and Medium Enterprises (MSME) in Bengaluru is targeting to cater to at least US$ 80 billion of this domestic demand over the next six years.

The newly formulated cluster has managed to raise Rs 140 million from central and state governments and its own members in order to assist startups and SMEs to design, test and manufacture electronic products. Additional funds have been sanctioned by the state government to facilitate boosting the growth of the industry and remove the existing challenges. Currently, obstacles faced by the industry from power and water shortage, lack of research and development and testing units, infrastructure problems are contributing to an adverse ecosystem. S R Patil, minister of IT, BT and ST, Karnataka said that the MSMEs are an essential segment in the field of manufacturing in the state and have importantly added to Karnataka’s economic growth. He added that if the ESDM sector in the state is equipped to acquire even 10 per cent of the entire domestic market of US$ 400 billion, it would be an accomplishment in itself.

The government of India’s is now strongly emphasising on promoting indigenisation and opening up the defence sector to FDI at 49 per cent. With this move, it is expected that the Indian MSME segment will play a crucial role in the whole supply chain for the aerospace and defence sector.