Background and Key Features
The classical definition of a Cluster is “Geographical concentration of units producing similar products and facing similar threats and opportunities”.
The idea of establishing a model cluster for electronics manufacturing has been proposed by the industry and supported by Department of Electronics & Information Technology to provide a supportive eco-system for encouraging investments and growth in this industry.
- Demand growth for Information & Communication Technology & Electronics (ICTE) Hardware products has far outstripped the growth in domestic production resulting in unparalleled growth in imports.
- Presently about 60% of the demand is being met through imports.
- As per government and industry reports, import of electronics is expected to surpass oil imports before 2020!
The demand supply gap is huge and in 2009, demand was at US$ 45 bn., against production of US$ 20 bn. Demand is estimated to have crossed US$ 75 bn. in 2011-12 against estimated output of US$ 35 bn. This is not a happy situation for our country as it exposes us to serious strategic disadvantages and keeps us dependent on technology and our essential needs on foreign countries.
If India achieves 25-30% annual growth in electronics production over the 12th Plan period:
- It will create millions of direct and indirect employment opportunities
- Contribute to meeting inclusive growth objectives
- Reduce Foreign Exchange outgo, and
- Add to government revenues while improving the quality of life and empowerment of our people.
The growth in GDP is directly correlated to ICTE penetration as it is recognised as a meta-resource impacting all sectors, an enabler for technological advancement and enhancer of competitiveness.
Way to succeed
All countries which have successfully set up a strong ICTE manufacturing industry and captured global markets have provided:
- Good physical infrastructure
- User friendly policy framework and approval mechanisms,
Low cost of funds,
- Reasonable tax rates and a supportive government.
ICTE hardware is the first sector to face elimination of import duty on account of WTO-ITA-I and FTAs leaving no room for any inefficiency.