The key to India’s independence? – The Dispatch
The quest for autonomy has accelerated in recent years, especially since the announcement of the “Make in India” program. This is undoubtedly an important government step, but although India’s post-independence development strategy was woven into rapid industrialization, most industries received significant trade guarantees so that their growth is not hampered by competition from more established foreign producers. From the outset, the private sector remained confined to secondary sectors in a protected market, ceding the growth of the state-run core sector.
With India missing out on the “third industrial revolution” including electronics, microprocessors, personal computers, cell phones, etc., the current situation demands that Indian manufacturers become globally competitive, but rather late in the process. the day. There is no doubt that the country needs to attract foreign technology as well as foreign direct investment. Obviously, if we are to manufacture globally, “Make in India” products would need global storage space. In this regard, the recently announced production incentive of Rs 76,000 crore, as announced by the Union Cabinet, is certainly a big boost for chipmakers. The program aims to “usher in a new era in electronics manufacturing by offering a globally competitive set of incentives” to semiconductor and display manufacturing and design companies. This, it is said, will pave the way for India’s technological leadership in these areas of strategic importance and economic self-sufficiency.
It is important to note that the incentive program is intended to attract global players engaged in silicon semiconductor factories, compound semiconductors, silicon photonics, sensor factories, semiconductor packaging -conductors and semiconductor design. The Semiconductor and Display Factory Establishment Program will extend tax support up to 50% of the cost of the project. The funds will be used to develop the Semiconductor Laboratory (SCL) of the Ministry of Informatics in Mohali through a joint venture. In addition to tax support, up to 30 percent will be provided to set up at least 15 manufacturing units for compound semiconductors and semiconductor packaging. The program will cover compound semiconductor / silicon photonics / sensor manufacturing plants and ATMP / OSAT semiconductor facilities.
Finally, what is most significant is the announcement of the creation of an Indian semiconductor mission which should be a nodal agency for the implementation of the semiconductor and ecosystem projects. ‘display. Discussions are already underway with the European Union, the United Kingdom, Canada and Australia in this regard. A key policy challenge is to allow consistency with respect to critical subcomponents on a par with other “ease of doing business” parameters, especially for LIP-based production.
These planned programs for large-scale electronics manufacturing and computer hardware are expected to go ahead in India. In the long run, the semiconductor industry will make advanced communication technologies such as 5G, Internet of Things (IoT), and Industry 4.0 more accessible and affordable. Experts are of the opinion that this will stimulate innovation in future technologies like quantum computing, health electronics. New generation electricity and mobility storage systems. In addition, to reduce the carbon intensity of the economy and facilitate the switch to renewable energies, the availability of semiconductors will play a key role.
It is significant that the government is determined to make Indian industry efficient, as Prime Minister Modi recently suggested that five companies from each sector should be among the best companies in the world. According to an official statement after a pre-budget consultation, the business sector should invest more in areas such as agriculture and food processing as well as electronics. To stimulate the private sector, he referred to the government’s emphasis on reducing the compliance burden to enable Indian businesses to emerge globally.
Not only in the electronics and IT sector, the trend towards self-sufficiency is also evident in the defense sector. In fact, Defense Minister Rajnath Singh recently said at the FICCI Annual General Meeting that India has let friendly countries such as the United States, Russia and France know that the systems of weapons and platforms required by the Indian armed forces will have to be manufactured in the country. .
Expressing the government’s goal of making India a global defense production hub and self-sufficient in military needs, Singh said it was agreed during talks with the French Defense Minister that a large French company would produce an engine in India by partnering with an Indian company. . According to Singh, the value of the Indian defense and aerospace manufacturing market would rise to Rs 1 lakh crore by next year, against Rs 85,000 crore, which the country will not only meet its export target of Rs 35 000 crore by 2024, but become a net exporter of defense equipment.
The government’s efforts are, without a doubt, laudable, but the question arises as to whether the private sector would come forward to make these plans a success. As we know, the country’s private sector spending on R&D is very low, much less than the emerging economies. Even though government spending in this sector is low, it is expected that more resources will be allocated to make products and systems globally competitive as part of the country’s self-sufficiency supply. India. At this point, publicly funded R&D, including basic research, by PSUs and research institutes and universities needs to be significantly increased, well above the dismal 1% of GDP today. Research focused on private sector delivery could also be supported, linked to meaningful participation in manufacturing at appropriate levels of the supply chain.
Innovation holds the key and not just the incentives, but the emphasis should be on research and active collaboration with technical institutes and universities in this regard. It can be mentioned here that spending on information technology is expected to reach a total of 93 billion dollars in 2021, an increase of 7.3% compared to 2020, according to the global research firm Gartner and that it are expected to rise further to reach $ 98.5 billion in 2022. However, experts believe that with the new incentives, it would not be surprising if the figure exceeds $ 100 billion by 2022.
It is becoming evident that India’s sincerity in achieving self-sufficiency has only taken shape in recent years, although political leaders have been concerned about it for decades. The success of ‘Átmanirbhar Bharat’ must become a reality because for an emerging economy like India, this is the key to achieving credibility on the global front. But a lot depends on the initiative and entrepreneurship of the private sector and the extent to which it can bring in the right technologies to make quality products and achieve economies of scale.
However, the challenge is indeed quite difficult as countries like South Korea, China and Japan have a head start, especially in the electronics and IT sector. Only efficient collaboration and local manufacturing are the key to success. Moreover, as it is feasible given that the huge domestic market of the country can attract foreign technology companies to come to India and with the latest technology. The right balance is the key to success.
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