Even as the Centre is pushing to position India as an alternative to China for manufacturing of electronics through various policy initiatives, the State governments now need to play their role in welcoming investors to tap the huge opportunity in the sector, the Minister of State for IT and Electronics Rajeev Chandrasekhar told The Hindu.
“The government of India is [an] enabling government, we create policies, we create framework, make it easy to do business, but the investments flow into States, the jobs are created in the States. And therefore, State governments need to play their role in attracting these investments and the State governments that do this effectively will essentially attract the investments, create the jobs and create economic expansion,” Mr. Chandrasekhar said.
Giving an example of “political failure” with the closing down of Nokia’s manufacturing plant in Tamil Nadu, the Minister added that States need to value these investments and treat them carefully “because this is only the first step... there will be a second round of investment or a third round of investment.”
Replying to a query, he said, “Our objective is not to shift anything from China to India. Our objective is to position India as an [alternative] manufacturing destination that can be a competitive, efficient destination vis-a-vis China..”
The Minister, who on Friday will inaugurate a new manufacturing facility in Tamil Nadu by Taiwanese firm Pegatron – which is among the largest contract manufacturers for Apple – added that some of the States that are proactively working for electronics manufacturing are Andhra Pradesh, Tamil Nadu, Karnataka and Uttar Pradesh. “These are fast emerging as electronics hubs... if you look at the Chinese example, they all started in three four areas as small clusters and the clusters grew. So, these are four existing clusters, I believe the fifth cluster will be in Dholera, Gujarat,” he said.
The Pegatron facility is expected to add about 30,000 jobs over the next few years and is being set up under the Centre’s Production Linked Incentive (PLI) scheme. Mr. Chandrasekhar added that the Pegatron facility is important because it is a follow-on investment which is a sign that companies who have invested in India want to continue to invest in India and grow and expand.
Mr. Chanderasekhar added that the Centre was working with other States as well who are not as focussed on these opportunities and that by the end of this month will announce something for them as well. The Minister will also be meeting State IT Ministers from all the States on October 1 and the focus of the meeting will be on the push for electronics manufacturing.
He also pointed out that In 2014, there was almost no mobile phone production in India and almost 90% of the mobile phones consumed in India were imported. However, currently 97% of mobile phones consumed in India are domestically manufactured.
“Electronics for the last 25 years has been dominated by China. After petroleum, the most traded commodity in global trade is electronics with a size of $1.5 trillion. Of this, about $900 billion was with China. Now post COVID, more and more companies want to diversify their plants to countries outside China. Vietnam, Thailand and India are options. But because of Prime Minister Modi’s PLI scheme more and more companies are coming to India,” he said.