Fearing that imports of electronic equipment would outpace petroleum products by 2030, the Planning Commission has recommended that 30 per cent of the government’s procurement of electronic hardware be reserved for domestic manufacturing. The commission says the country’s manufacturing capacities for electronic hardware are woefully behind the demand and would not expand unless a big push is given.
According to the commission's estimates, the country’s capacity of electronic manufactured goods stood at about $20 billion in 2009, whereas the demand was at $45 billion.
“If we do not give a big push to electronic hardware equipment manufacturing, we will not be able to convert ourselves into a high-tech manufacturing economy,” Minister of State for Planning Ashwini Kumar told Business Standard.
In order to encourage domestic manufacture of electronic hardware, the Planning Commission has proposed that 30 per cent preferential access or reservation be given to domestic manufacturing in the government procurement, he said.
If the country’s capacity of manufacturing electronic hardware continues at the current rate and the demand also grows at the present pace, the demand would expand to $400 billion and the capacity to $106 billion by 2030, he said.
“It is possible that by 2030, our import bill for electronic equipment will outpace the petroleum, oil and lubricants segment,” Kumar said.
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During 2010-11, India's import bill of this segment stood at $101.7 billion, while that of electronic equipment was at $36.8 billion. The Commission has also suggested to the Cabinet to set up two plants to manufacture semiconductor wafers with a total investment of Rs 7,500 crore to boost the country’s electronic hardware production. Kumar said locations for the plants were yet to be identified.
The Commission is likely to focus on 11-12 per cent growth in the manufacturing sector to grow employment by 2 million jobs in a year in the 12th Five-Year Plan, beginning 2012-13.