Article posted by Nitin Dahad, for UK Trade & Investment
5 July 2012

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Following the article highlighting the initiatives being made for Electronics in India, the Indian government has in July 2012 approved a proposal to develop ‘electronic manufacturing clusters’, as part of its policy to help drive the growth of an indigenous ecosystem in electronics design and manufacturing.

This could be a key driver for growth in opportunities for UK companies in addressing the needs of the Indian electronics market – especially with British companies like ARM, CSR and Imagination Technologies already having a presence there.

Speaking in The Hindu Business Line newspaper in India, Mr. P.V.G. Menon, the president of the India Semiconductor Association, said, “The scheme does not distinguish between Indian and foreign investors. FDI [foreign direct investment] investment into the sector is very welcome and we hope that this will be in the area of high-value-added manufacturing.”

The expectation is that this scheme will enhance innovation and entrepreneurial activity in India’s electronics industry. This sector in India has not been known for producing innovation for the Indian market, and this is something that the Indian government is keen to promote.

The approval of electronics manufacturing clusters promotes domestic manufacturing of electronics by providing support for all parts of the manufacturing ecosystem to co-locate and derive co-location advantages. It will also help the small and medium enterprises sector in electronics to grow, and help strengthen the supply chain for domestic manufacturing of electronics. To read the statement from the Government of India, click here.

Andhra Pradesh already promoting electronics and IT under its policy

The central government decision on electronics manufacturing clusters follows the lead taken by the Andhra Pradesh (AP) Government last month (June 2012), when it announced its Electronics Hardware Policy 2012-2017. The AP government was in London in May to promote the state as India’s leading location for technology companies looking to get a foothold in India.

Andhra Pradesh, with a population of over eighty million people, is the fourth largest state in India. With the third largest nominal GDP of US$ 123 billion in 2011, it has emerged as one of India’s fastest growing states with per capita GDP growth of 43.9% over the last 10 years. Over the last decade Andhra Pradesh has transformed itself into a leading destination for the IT / ITES (IT engineering services) sector and today Andhra Pradesh is the fourth largest exporter from India, contributing to approximately 15% of India’s software exports.

The state capital, Hyderabad is home to world class IT infrastructure and a very well established university ecosystem. The state’s web site says it has the most transparent investor-friendly government policies, a large talent pool and relatively low cost of living, and it ranks second among investment destinations within India.

The state contributes the highest number of engineering graduates to the country’s talent pool today. In fact when the IT secretary visited London recently to promote the state, officials were keen to point out that many of the Indian engineering staff in Silicon Valley, USA, were also graduates from the state of Andhra Pradesh.

Following the state’s announcement of its Electronics Hardware Policy 2012-2017, it has been reported that Samsung, Hitachi, Huawei and Solartech are already exploring setting up in Andhra Pradesh – see article in The Times of India.


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Article posted by Nitin Dahad, for UK Trade & Investment
5 July 2012

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