Race for Technology Advancement

Successful Entrepreneurs-art2

India’s Technology approach

Technology has given the advantage of being ahead in the competition and leading the path towards development. Every nation is racing to develop its economy with the help of technology to sustain itself in the race for the future. India never had the opportunity to hands-on the best-in-class technology initially. Every piece of innovative technology was being brought to India after the developed nations had their experience. The Indian government was planning to make a shift in the mindset of becoming a tech-driven society. 

In the middle of the covid19 pandemic, China’s PLA tried to capture the Indian land area in Ladakh territory, which was a failed trial, and border tensions arise between India and China since June 2020. Indian government knew the intentions of the Chinese government and started planning to counter China’s dominance in the manufacturing sector and especially in the electronics market. India invited many potential foreign institutes who were searching for a better alternative to Chinese manufacturing hub as no country trusted China anymore. 

Introduction to Schemes 

Since the Modi government has taken on the administrative operations of India, they are constantly emphasizing making it local. ‘Make In India’ initiative was one of them. The IT hardware manufacturing in the nation had the least amount of support compared to Chinese manufacturing units. 

Indian manufacturers or foreign manufacturers interested to set up an IT hardware manufacturing plant, were offered the Production Linked Incentive scheme (PLI) to boost and make India independent in hardware as well. As per the industry estimates, the electronics manufacturing sector suffers from a disability of around 8.5% to 11% on account of lack of adequate infrastructure, domestic supply chain and logistics; high cost of finance; inadequate availability of quality power; limited design capabilities and focus on R&D by the industry; and inadequacies in skills development. 

The scheme will extend the 4% to 2% / 1% incentive to net incremental sales (during the base year) of products produced in India and included in the target to qualified companies for four years. The target segment within the PLI will include (i) Laptops (ii) Tablets, (iii) All-in-One PCs, and (iv) Servers.

The Chip war 

Every electronic item including our cars; runs on a motherboard that makes our devices and vehicles smart and easy to use. If anyone small part goes out of operations the machine stops working. The shortage of semiconductors was faced by many manufacturers in 2021 due to the global supply chain hit by the Chinese virus. Every company understood the importance of having an alternative to china’s dominance in the manufacturing sector, and again an opportunity popped up in the market that the Indian government did not miss to grab. 

Taking the advantage of the situation, the Indian government signed a deal with a leading Taiwan company to set up a chip manufacturing company in India and promised to provide all the necessary permissions to initiate their operations in India within no time. 

Global approach 

The government is eying to make India a reliable hub and partner to manufacture critical electronic items that are high in demand, and have the potential to shape our future. 

India was never ready to manufacture such a critical and complex product as it requires an uninterrupted electric power supply and millions of liters of pure water. Government has a plan and is acting according to it. Individuals and corporates from India and foreign countries have shown interest in fabricating chip manufacturing units in India. It will be crucial to watch, the government’s steps towards rolling out the policies and their effective implementation. 

-Parag Ahire

Leave a Reply

Your email address will not be published.