Expect 15 per cent growth in production and exports this year
Small and medium electronics hardware manufacturers in Andhra Pradesh are urging the government to attract more mother industries to the state, besides accelerating the process of developing infrastructure, to enable them to compete globally.
“Despite achieving a production of Rs 6,500 crore and exports of Rs 650 crore from Andhra Pradesh in 2008-09, there are still a lot of lacunae that need to be addressed for the industry to grow rapidly. Mother industries, including Motorola, which proposed its manufacturing base in the state, have gone to Chennai. The government should invite computer peripherals companies like Intel to the state,” D Venkata Rao, administrative secretary of the Electronic Industries Association of Andhra Pradesh (ELIAP), told Business Standard.
The industry expects 15 per cent growth in production and exports this year, he added.
Around 300 industries, employing 30,000 people in the state, which houses mother industries like the Defence Research and Development Laboratory (DRDL), Electronics Corporation of India Limited (ECIL), Defence Research & Development Organisation (DRDO), Bharat Heavy Electricals Limited (BHEL) and Bharat Electronics Limited (BEL), together achieved a turnover of Rs 6,500 crore in 2008-09.
The main contributors to this growth were telecommunications, defence and strategic electronics, railway signalling equipment and medical electronics.
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“One of the constraints that is hindering our growth is the lack of an export zone and cargo facilities in Hyderabad. The Electronic Hardware Park on the city’s outskirts is not a special economic zone (SEZ) attracting export markets. We are demanding that the government should grant the park SEZ status, besides expediting the process of setting up cargo facilities at the international airport as soon as possible,” Rao said.
“In fact, the international airport concept was mainly driven by us (ELIAP). The officials are more concerned about developing commercial and realty in SEZs and are neglecting SEZs for electronics. Setting up an exclusive export zone and speeding up cargo facilities would only enable the industry to get the components imported from abroad and process them here,” he said, adding that the association is requesting the government to extend zero customs duty on the products.
The Andhra Pradesh government had allotted 168 acres to electronics product manufacturers at the Electronic Hardware Park near the international airport. About 20 industries have established their units, while 10 are yet to start operations.
According to ELIAP, which has a member-base of 250, including half-a-dozen publicly-listed entities like MIC Electronics and Astra Microwave, the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has started an electronics SEZ at Maheswaram near Hyderabad.
“About 38 industries have applied for land allotment, while only five companies have got the in-principle sanction for allotment of land a year ago. The SEZ has not begun functioning. The place chosen for this SEZ is not suitable for setting up an industry,” Rao said.
He added that Fab City had been started for fab manufacturing, but this was later changed to semi-conductor manufacturing and finally to the production of solar cells.
“Only a few units have started functioning from the Fab City. Plenty of land is available in and around the Fab City and the electronics SEZ can be shifted near it. This will help attract more export-oriented companies,” Rao said.