“WE WANT NATIONAL CHAMPIONS WHO’LL BE GLOBALLY COMPETITIVE”

Against the backdrop of the Covid backlash against China and India’s quest for economic selfreliance, the Union electronics and IT ministry has unveiled wide-ranging incentives to encourage manufacturers of electronic goods and components to set up shop in the country. In an interview with Editorial Director (Publishing) Raj Chengappa and Deputy Editor Shwweta Punj, Electronics and IT Minister Ravi Shankar Prasad paints his vision to turn India into a global electronics manufacturing hub and explains how this goal can be realised. Excerpts:

Q.Prime Minister Narendra Modi and you made a rather dramatic announcement of India aspiring to be the No. 1 mobile handset manufacturing destination, a $190 billion market, by 2025-26. How do you propose to make this a reality? A. When we came to power in 2014, India had only two mobile factories. Now, we are [more than] 250, including [units making] components. In Noida and Greater Noida, over 90 factories have come up. In 2014-15, the mobile manufacturing industry’s revenue was Rs 18,990 crore. In 2018-19, it reached Rs 1.7 lakh crore, and in 2019-20, it increased to Rs 2.25 lakh crore.

Overall in the electronics [sector], production value in 2014-15 was Rs 1.9 lakh crore, growing to Rs 4.58 lakh crore in 2018-19, while the projection for 201920 is Rs 5.48 lakh crore. India’s global share [in electronics] has risen from 1.3 per cent in 2012 to over 3.5 per cent at present. We have created direct jobs for 2 million people in the past five-and-ahalf years and all global mobile brands, including Apple, are in India.

Q. What incentives are you offering to help India become a global hub of electronics manufacturing?

A. It’s a nearly Rs 50,000 crore package: Rs 40,000 crore comes as production-linked incentive, over Rs 4,000 crore as cluster scheme incentive and another Rs 4,000 crore as component manufacturing incentive. Why this? One, mobile phone production is dominated by five-six players, who control 80 per cent of the manufacturing globally. We call them global champions. Initially, we want to attract 5-6 global champions, who will benefit from the production-linked incentive. Second, we don’t want just the bride and groom, but the entire wedding procession to come—that is the cluster. The third component is spare parts, chips and equipment required to make mobiles. We also want [to create] five national champions, we want to give them incentives. The national champions will be globally competitive. That’s the whole architecture we have thought of.

Q. Let’s take the plan to create electronics clusters. Land is a state issue and that’s a concern for companies. A. Things are changing. We discussed the scheme with many state governments and other stakeholders before finalising it. My secretary, joint secretary spoke to state officials. Many state governments are coming on board. The biggest asset of electronics manufacturing is that it is non-polluting and generates employment. I am pretty sure that the scheme to create 200-acre manufacturing clusters will materialise. We (the Centre and states) are working as a team.

Q. Under the new policy, how many clusters do you expect to create? A. Twenty clusters have already come up. A large number of EMCs (electronics manufacturing clusters) have come into operation. Some 204 companies have booked 847 acres of land, with a proposed investment of

Rs 32,754 crore in EMCs. We are now thinking big.

Q. One of the issues you mention is that of core components, which largely continue to be imported. How do you plan to make India self-reliant in that?

A. Electronics manufacturing has many phases. The first is assembling, after that the manufacturing of components. India is now building and exporting many components, from motherboards to chargers to batteries and lots of other equipment. As we are thinking big, it’s very critical that we incentivise components manufacturing. India offers a talented human resource and a good market. The country has close to 1.12 billion mobile phones, of which some 700 million are smartphones. We are a huge market. Today, over 85 per cent of the country’s internet traffic is through mobile phones.

Q. To become a global electronics hub, India will have to depend on global value chains in China. How will this sync in with the government’s talk of self-reliance? A. Atmanirbhar Bharat is clearly not India in isolation. It is not about an inward-looking India. Atmanirbhar Bharat means India developing a manufacturing hub that is globally competitive. Post-Covid, I see that a big opportunity beckons India.

The Atmanirbhar Bharat campaign is not against any country, it is just about being India-positive. We have also gone up in the ‘ease of doing business’ rankings.

Q. We have a troubled relationship with China because of border disputes. The world at large has also had issues with China over its delayed revelation of the Covid outbreak. What will your approach towards China be?

A. I don’t wish to become country specific, I should not. There is a [dispute resolution] mechanism available, [there’s] engagement at the armed forces and diplomatic levels. India of 2020 is not the India of 1962. It is an India led by a leader of courage and conviction. As far as Chinese goods are concerned, as an Indian, it troubles me that during Diwali, even idols of Lakshmi and Ganesha come from a particular country. I think India has enough capability to produce Lakshmi-Ganesha idols. India’s manufacturers need to think about it.

Q. Companies are concerned about labour and land issues, as well as hiring policies. Will we be able to provide them flexibility, ease of doing business in the real sense of the term so that they are able to operate efficiently?

A. In spite of [the hurdles], we have grown to over 250 mobile factories. Many of these are employing 20,000 or more workers. We have carried out a lot of labour reforms. Now, if a company offers good incentives and working conditions, workers also respond positively. India is changing, becoming a manufacturing hub. As far as the central government’s assistance to states is concerned, I am just a phone call away if any problem arises. I will personally intervene if there are problems.

“POST COVID, A BIG OPPORTUNITY BECKONS INDIA. ‘ATMANIRBHAR BHARAT’ IS NOT AGAINST ANY COUNTRY, IT’S INDIA-POSITIVE”