IESA See ‘PMA’ An Instrument to Encourage Domestic Industry Growth
A direct-speech on the current scenario of the ESDM sector, IESA, lately concluded the ‘Makeathon’ first-of-its-kind initiative in India enabling the maker community in to develop ESDM innovations for India. With Niloy Banerjee, Consultant Editor, BISinfotech, veteran, Rajesh Ram Mishra | President | IESA also highlighted their stance on overcoming the bottlenecks on domestic manufacturing. How the premier association is encouraging State Governments to adopt the PMA policy and also the impact of PMP is incentivizing the domestic growth. Edited Nub.
- What is the Institutional Mechanism IESA has undergone to promote ESDM sector including investment promotion & branding?
India Electronics and Semiconductor Association (IESA) is the premier trade body committed to the development of a vibrant Indian Electronics System Design and Manufacturing (ESDM) ecosystem and evangelizing the dream of establishing “Brand India” that is recognized worldwide as a go-to destination for electronic products. We are a non-profit organization and our vision is to bring the Indian industry, government and academia on a common platform and jointly work towards developing and promoting Made-in-India products for the global markets.
Our key activities:
- Working with Government on policy, regulatory issues
- Promoting innovation, startups through incubators, accelerators and initiatives such as Makeathon
- Support training, skilling effort in partnership with Electronics Skill Sector Council of India (ESSCI), Universities and other training institutions
2. How does ‘Makeathon’ like the one concluded by IESA help drive-in innovations in the Indian semiconductor and electronics systems industry?
“IESA Makeathon” is a first-of-its-kind initiative in India enabling the maker community in to develop ESDM innovations for India. Intent of this event is to select top teams with ideas to solve problems across various verticals such as Smart Communications, Agri Tech, Water Management, Urban Traffic, Smart Cars / Vehicles, Robotics, Waste Management, Education, Surveillance / Security, Medical / Health …etc and support them in building electronic products or systems to address challenges.
Makeathon gives young minds an opportunity to nurture their ideas into reality and solve problems and provide active mentoring as well as electronic component support from the member companies of IESA. Makeathon also fosters active collaboration between industry and universities/colleges to further expand talent pool in India.
3. India has entered into Free Trade Agreements (FTA) with Thailand, ASEAN, Korea, Japan, etc., wherein import of electronic hardware from these countries is at preferential duty, lower than normal tariff rate? How is this boasting the indigenous market?
While the tariff rates and preferntial duties do affect domestic ESDM industry, an electronics product is a mix of hardware, software and material technologies. As such for growth of indigenous products, where significant value can be added at all levels starting with system design, leveraging indigenous software strength and general manufacturing expertise, coupled with lower cost of operations does make a good case for Making in India. While FTAs are needed to ensure geopolitical stature of India and open global marketplace, India’s inherent strengths, detailed above, are significant advantages as well. We at IESA believe, with a concerted effort of Govt & industry, domestic industry serving the domestic market will be a great growth story in the next 5-7yrs.
- What are the challenges the Domestic electronics hardware manufacturing industry is currently facing in terms of, power, finance and freight, supply chain, high transaction cost etc.
Finance (for large manufacturing projects in electronics & semiconductor), freight and supply chain are still major challenges the industry is facing. However, we are working proactively with stakeholders such as Govt, Veuture Funds, and others to ease the pain esp. in financing.
5. How instrumental has IESA been to encourage the State Governments to adopt the PMA policy (protectionist policy instrument)?
We at IESA don’t see PMA as a ‘protectionist policy’ but rather as an instrument to encourage domestic industry growth and as an incentive to push industry in increasing value addition in ESDM products. As such, we work closely with number of state governments in evolving their ESDM policy. PMA and consolidation of demand across the state departments are going to be instrumental in supporting Make in India.
6. Do you think Government is in a position where then can levy interest subsidy, credit default guarantee, etc., to encourage newunits and expansion of existing units? How closely is IESA working with Govt to underline these proposals?
IESA is working with all relevant Ministries of Govt of India in ensuring relevant mechanisms are created for fiscal support and for fiscal prudence. As such, yes, we believe Govt can do a lot by defining financial incentives, checks and balances to foster positive growth of the industry.
7. How has been the Govt’s approach towards Phased Manufacturing Programme (PMP) and/or fiscal interventions to create a lucrative ecosystem for the ESDM sector?
PMP for Mobile Manufacturing is showing great success and we are working with Govt, along with all other stakeholders, to introduce PMP for other segments as well – for eg LED TVs. As stated before IESA believes the right incentives can foster industry growth in a significant manner.
- Do you think the public bodies have simplified clearance procedure for import of goods required for R&D and design activity, including Start-ups and in emerging technology sectors?
Yes! and the recent announcement to allow used equipment, machinery for electronics manufacturing is a good example. However, we also feel that effort still needs to be made to make processes streamlined, transparent and digital to make it easy for everyone and to speed up the processes.
9. Are we still on the grounds or manufacturing Export Quality goods in electronics, and how strong is the Merchandize Export from India Scheme (MEIS) of Foreign Trade Policy functioning to bring a global acquiring market for India?
We are moving up and its growing. Electronic goods like mobile phones manufactured in India are doing pretty good in the sub-continent. Yes, we still have a chasm to cross when it comes to making ‘Made in India’ a hallmark for quality and to match our competitors, but we are seeing a lot of push for world-class products esp. from startups & SMEs.
- Has IESA been able to woo the State Governments to adopt the Public Procurement (Preference to Make in India) Order 2017 (PPO 2017), in procurement of electronic goods?
As stated earlier, we are working with States in defining these, however States also have to keep their geographic location, existing industry landscape, skill availability, procurement power among other things before creating their own Preferential Market Access (PMA) effort. We at IESA are doing our bit to sensitize the States about the benefits of this as an ‘instrument’ for growth of local industry.
