The demand for (printed circuit board) PCB, a vital component in any electronic equipment, is growing at a much faster pace in India owing to the huge consumption of electronic goods in India including mobile phones and computers.
However, the domestic PCB industry is yet to take off in a big way in tapping the opportunities in this space, thanks to the long wait to obtain environment clearances from the government and the import of Chinese-made PCBs which are 15-20 per cent cheaper than Indian-made PCBs.
“The tight government regulations, including the zero-discharge (emission) norms, make a PCB manufacturer wait for about three months to one year to get clearance to start a unit in India. This is one reason why many a foreign PCB manufacturer is hesitating to start their operations in India. Even though the demand is huge, there are still a fewer players in the PCB space in India, thus forcing the electronic goods manufacturers to import,” said M Anil Kumar, president, Indian Printed Circuit Association (IPCA), the industry body which has over 200 registered members.
Agrees Alok Garg, MD, Cipsa India, “The vital thing for a PCB firm is to get environmental clearance. On an average, it takes not less than four months to secure clearances. Besides, we also need to import most of the plant machinery from Europe, which also takes a long time.”
PCB is an electrically insulating board onto which electrical components are assembled and wired together. The PCBs are used with memory, motherboard, graphics cards and many other types of electronic devices.
According to estimates, total consumption of PCBs in India is worth about $2 billion a year, and is growing around 40 per cent year-on-year. However, the total production of PCBs by Indian manufacturers are in the range of $300 million, thus giving a lot of headroom for the industry’s growth. About 60 units are in operation in India which include about 15 large manufacturers including AT&S and Cipsa.
PCB manufacturers in India mostly caters to the defence sector since the defence norms require to source these strategic components locally instead of importing from outside. However, the mobile phone, PC and communication technology sectors which are biggest consumers of PCBs still rely a lot on imports.
“Even companies like Nokia, who have a manufacturing centre here, prefer to import the PCBs due to the absence of volume suppliers in India,” adds Kumar. Some of the players who are already in India, are now going on aggressively in their expansion strategy to fill the vacuum.
Spanish firm Cipsa, which has partnered some Indian entrepreneurs, recently opened its new manufacturing facility in Tumkur, which is capable of manufacturing 500,000 square metre of double side and multi-layer PCBs and 250,000 square metre of single side PCBs per annum. The company has invested close to Rs 85 crore in the new facility.
“A lot of electronic contract manufacturers are now coming into India. Although the demand is huge there is a shortfall in the local market, taking advantage of which vendors are importing relatively cheaper Chinese made PCBs. With our Tumkur facility, we will be able to compete with Chinese PCB manufacturers in pricing,” said Alok Garg, MD, Cipsa-RIC India.
Austrian PCB manufacturer AT&S which started India operations in 1999 after acquiring Indal Electronics, has announced opening a second plant in Nanjangud in Karnataka for manufacturing multi-layer PCBs in India. For an investment of about $57 million, the plant located beside the existing plant, will specialise in multi-layered PCBs for automotive, medical and industrial applications.
Industry sources say German firm Wurth Electronics has also shown interest in starting operations in India. They are doing some design works in India now, and have acquired land in Mysore to explore the possibility of manufacturing in India, sources said.
IPCA has also begun making efforts to lure foreign firms to invest in India. The industry body is also negotiating with a Japanese company on the issue.
“As a forerunner, IPCA, along with Japan, would release a set of standards followed by the industry in Japan that could be a benchmark for manufacturing units in this segment in the country,” said Kumar of IPCA.
