2/3rds of India's Electronic Components Demand Met By Imports.

New Delhi: A nationwide survey has found that two-thirds of domestic electronic components demand is met through imports, the bulk of which are from South-East Asian countries.
     
The survey was conducted by the Department of Information Technology in association with ELCINA Electronics Industries Association of India.
     
"We are compiling data of all electronic components available in India. So far, we have learnt that the size of the total electronics  components industry was over Rs 48,000 crore (USD 9.2 billion) during financial year 2010, out of which over 60 percent was met through imports," a government official privy to the study told PTI.
     
Furthermore, value addition in locally manufactured components was low because of the high dependence on imported raw materials and inputs. As a result, actual local content met less than a third of total demand.
     
He said this kind of report is being compiled after a gap of almost two decades and was based on information from the industry, which has been cross-checked by various government agencies, including the Directorate General of Foreign Trade.
     
"After the licence raj was abolished, industry had stopped reporting their numbers, as it was not mandatory. This report is being compiled from the scratch based on over 15 months' study," the officer said.
     
Among other sources, ELCINA collected data from almost 600 companies for the study and has recommended that the study should be conducted annually to arrive at more accurate and robust disaggregated data for each component and product category.
     
Government sources said the report's findings on the domestic component industry are alarming, as most of the articles produced in the country are based on old technologies and need to be urgently upgraded.
     
"Indian players are making components which are being replaced by new technologies and unless they adopt new technology, they will lose further market share. There is no doubt about the quality of components Indian companies manufacture, but they seem to have lost ground to imports on cost," the official said.
     
He said the government's proposals to frame robust standards for the Indian electronics market and give preference to domestic manufacturers in the award of contracts could be an attempt to revive the industry.
     
The comprehensive study, which is expected to be officially released in the first quarter this year, also tracks value addition to final products in India. This is important from the perspective of upcoming policy decisions, such as the benchmarks that the government needs to define for giving preferential treatment to indigenous manufacturers in the IT and telecom industry.

Source : zeenews.india.com