With investment proposals of over Rs 62,000 crore featuring during 2013, the performance of electronic sector overtook that of telecom, once a top notch segment of Indian economy.
Though the largest chunk of investment of about Rs 51,550 crore was approved during the year and is yet to close, about 20 entities separately proposed to invest about Rs 12,000 crore in Indian electronics manufacturing sector which is highly dominated by imports.
In absence of corrective measures, it is estimated India will be importing electronics products worth about $ 300 billion, which will be more than the value of the country's imports of petroleum products.
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"The present import bill of crude oil is about $ 140 billion. Do you think Indian economy can afford to import $ 300 billion of consumer electronics. We will become bankrupt. We have no choice than to build manufacturing sector in our country," Telecom and IT Minister Kapil Sibal said.
The Indian electronics sector during the year came up from ventilator after government gave it a booster dose of first ever policy framework in 2013- National Policy on Electronics.
"I would say both 2012 and 2013 should be seen together as foundation year of electronic system and design manufacturing sector. National Policy of Electronics was approved this year but some of the key elements were approved in 2012," Department of Electronics and IT's Secretary J Satyanarayana said.
After successfully putting in place policy framework required for hardware manufacturing, DEITY has started working on second stage of electronics sector development.
This would involve streamlining processes in terms of taxations, ease of business and creation of intellectual property rights.
"Demand of electronics product domestically is expected to grow to $ 400 billion by 2020. We have seen huge interest for investment in electronics sector. This is just a beginning. Now we have to work for second level of policy intervention which related to streamlining business process, approvals and taxations," DEITY Joint Secretary Ajay Kumar said.
One of significant steps in this direction was a hike in import duty on settop boxes from 5 % to 10 %. This enabled domestic settop box makers looking at a turnover of about Rs 4,500 crore in the financial year by capturing 50 % market share and creating employment for about 12,000 people.
Foreign STB makers almost wiped out domestic players during phase I and II of cable TV digitalisation with around 95 market share.
Flat panel Television makers reaped benefit of one such decision when government imposed 36 % import duty on flat panel TVs starting August that were brought into India as part of baggage by passengers from abroad, the source added.