ELE Times: Manufacturing in India for the Last 5 Years
ELE Times: Manufacturing in India for the Last 5 Years

Jun 12, 2019

Vipin Chauhan, ACM, Sales, and Business Development, NMTronics, is quite bullish about Indian manufacturing prowess. He said, “Yes, indeed it was way too much expected out of India’s new government formation in 2014, because of their leadership’s style of working. Not everything expected has been achieved, but many appreciable initiatives have been taken to ensure the expected is achieved during their tenure. The most important initiative is Make in India. This isn’t just an initiative, but also an intent that this government wanted during their tenure of five years, which has taken India into the limelight, thereby showcasing it as a global manufacturing hub. The right decisions and policy frameworks are drawn to attract foreign investments, promote local manufacturing, and indigenize products have made a strong foundation for India in years to come.

This can be witnessed by the Chinese and other foreign investors foraying and setting up their plants in India. They’ve realized the power of real potential in India, as their own country is getting expensive day by day. With economic workforce and incentives of capital investments have drawn them to India as a prime destination. This whole process hasn’t just increased the number of jobs available but also exposed our human resource with a global standard of manufacturing.” On answering the electronics manufacturing prowess of India in the last 5 years, Dr. Sreeram Srinivasan, CEO, Syrma SGS Technology, said that “the Indian electronics and system design manufacturing (ESDM) industry has been the focus of attention and is widely recognized as one of driving forces in our vibrant and modern economy. The domestic electronics manufacturing industry has spiked from a growth rate of 5.5% in FY15 to 26.7% in FY18.

This growth is supported by various government initiatives such as the Make in India and Smart Cities project, which aids a holistic approach to economic development. With the Make in India initiative thrusting the need for domestic manufacturing of electronics hardware, India has seen an immense growth in mobile phone manufacturing, where the number of mobile and accessories manufacturing companies has increased to over 260 companies and employing over 6.7 Lacs people, as per the report of the India Cellular and Electronics Association (!CEA).” Dr. Sreeram Srinivasan believes that “the government has shown its strong intention towards achieving zero dependencies on imports for meeting the electronics hardware demand through policies such as the Modified Special Incentive Package Scheme (M-SIPS), Electronics Development Fund (EDF), Preferential Market Access (PMA), etc. These initiatives will facilitate growth in local manufacturing of electronics hardware over the coming years.”

Explaining the manufacturing prowess of India in the last five years, Aditya Ratnaparkhi, Executive Director, EMST Marketing, discusses, “Indian manufacturing industry has come a long way in last 5 years. Now many companies are in the process of setting up or have already set up their large scale manufacturing units in India, and in the next 5 years, it’s going to grow.” Speaking to ELE Times, Suresh Nair, Director, Leaptech Corporation, said, “Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India had launched the Make in India program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. This has helped the Indian industry, especially the electronics industry; many foreign companies have set up facilities in India in the past 5 years for manufacturing mobile phones, consumer electronics, automotive electronics, etc. Smartphone manufacturing has seen tremendous growth in the last 3-4 years, which is a great achievement of this current government.”

Diving Manufacturing in India

Responding to the sectors that drive manufacturing, Vipin Chauhan, ACM, Sales, and Business Development, NMTronics said, “Inevitably, the Mobile Phone manufacturing is the one big segment driving the need for manufacturing India, which has profoundly come up quite strong in last few years. Till 2014, India had less than 3 mobile manufacturing plants established. Now, India has more than 268 plants manufacturing Mobile phones in India, making us the second-highest mobile phone producer globally, after China. From the production capacity of 3M units till 2014, India has produced 11M handsets in 2017. This accounts for approximately 11% of global production from a mere 3% in 2014. With this increase in production, the telecom industry is India’s top five employment opportunity generators. This whole success story is both geopolitical as well as the efforts of the current government.

With the Introduction of Phase Manufacturing Program (PMP) in 2017, by the Government of India to build a robust indigenous mobile phone production ecosystem, it has transformed companies from being an importer to manufacturers. The levying of duty from mobile phone chargers to planned Vibrator Motors and Ringer won’t leave any stone unturned into making India a global manufacturing hub.” On asking the areas that drive manufacturing the most, Dr. Sreeram Srinivasan states that “growing customer base and increased penetration of consumer durables have provided enough scope for the growth of the Indian electronics sector. Mobiles and consumer devices account for close to 45% of the country’s demand for electronics. High initiatives have been taken to meet the demands locally.” He further added that” in addition to increment in demand for broadband and communication equipment, loT devices in the country as a result of Government’s digital initiatives, smart cities paved the way for Industry growth and demand, which needs to be addressed for localization.

The market will also see significant demand from emerging application areas like automotive electronics, including electric vehicles, and connected mobility-related applications.” On answering the manufacturing driver Aditya Ratnaparkhi said that “we’ve seen a boom in the lighting industry in the past few years with many Indian companies entering into this segment and expanding their capacities both SMEs & corporates. In the coming year, consumer goods and industrial electronics manufacturing will be dominating factors for our industry. Suresh Nair stated in the areas that drive manufacturing the most that “the electronics industry has seen a good manufacturing growth in the last years. Other industries are also gaining manufacturing momentum. The automotive industry will have good growth with electric vehicle sales start picking up.”

Products Manufactured in India

Commenting on the hot-selling products of NMTronics, Vipin Chauhan said, “the Fuji NXTlll Platform is the all-time favorite for the industry. Its flexibility, modularity, scalability, and reconfigurability make it an outstanding performer for critical and complex product assembly. The demand for an entire SMT machine solution has drastically gone up in the last couple of years. We see an upsurge in investments by foreign companies into the mobile phone and accessories segment. These investments are usually made for multiple SMT lines targeted at Chinese mobile phone brands established or established in India. This can be witnessed by the shortage of skilled workforce the industry is facing today. The best indicator of this is the machine sales data. The number of machines being sold by us has gone up to 5 times in the last two years.”

Dr. Sreeram Srinivasan further elaborated on the drivers of manufacturing that, “we see the demand for automotive electronics is scaling up due to electronification and electrification of the vehicles as a result of the increasing need for safety and comfort. Being the 4th largest automotive industry in the world, self-reliance is imperative for electronics. In contrast, now close to 65% of the electronics for this industry are met through imports. We, as an Industry body, understood the vital importance and potential of the auto-electronics market and established a dedicated state-of-the-art and model electronics manufacturing service factory for India in the Delhi-Mumbai Industrial corridor, which will serve this industry.” On the products that are in demand in the industry, Nair said that “all of our equipment is meant for PCB assembly automation. For instance, Yamaha, ITW EAE, and Omron have seen good growth in the years gone by. Other products like Deprag Screwdriving automation has also gained a handsome growth.”

India’s New Electronics Policy

Vipin Chauhan is hopeful about the New Electronics Policy (NEP) in India. He said, “We expect the New Electronics Policy to be an extension on the Modifies Special Incentive Package Scheme (MSIPS). This policy gave the initial thrust required for the industry by motivating business houses with lucrative incentives on capital investments. As of date, only 75% of India’s total consumption of mobile phones is produced, even after levying duties under PMP. We still have a lot to do in this segment. Also, total exports for electronics goods are about USO 6.4M; however, the imports are ever-increasing, creating higher trade deficits. We expect this new policy to address all of these issues in the right manner to motivate businesses to invest more for Indian markets with most of the raw material sourced locally.”

The New Electronics Policy has been talked about extensively in the industry. Dr. Sreeram Srinivasan candidly spoke about that, “the NEP 2019 was formulated with a vision to position India as a global hub of ESDM Industry by supporting domestic manufacturers through financial interventions via the Phased Manufacturing Program (PMP) by developing core competencies in emerging technologies. As an industry body, our expectations would be having government support in introducing PMP for all identified key areas, supporting manufacturers with plug-n-play infrastructure, and providing competitiveness against FTAs.” On the outcome of the NEP 2019, Nair said, “the new policy will help the electronics industry to grow for sure. The policy will attract a lot of foreign and domestic investment. This could be an enhanced version of the erstwhile MSIPs scheme.”