“Today the value addition taking place in India is about 15% to 20%, in certain areas of electronics manufacturing. This indigenous value addition consists of the most labour intensive components, which means that the employment generation is quite significant.
“The large number of jobs that are being created is a desirable aspect of the value addition in electronics components that we are doing. Going forward, we intend to further deepen the value addition. We intend to take it up to 35% to 40%.”
This was stated by S. Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY), in conversation with Anoop Verma, Editor-News, ETGovernment. In the interview that follows, S. Krishnan sheds light on the steps that the MietY is taking to grow electronics manufacturing in the country and encourage advanced research and development in AI.
Edited excerpts:
What are the new initiatives that the Ministry of Electronics and Information Technology is taking to strengthen the country’s electronics manufacturing sector?
The Hon’ble Minister of Electronics and Information Technology has talked about a new scheme to strengthen India’s electronics component manufacturing sector. We are hopeful that this scheme will soon be approved. A significant amount of progress has already been made in the area of indigenous electronics manufacturing– we can see this progress in the area of mobile phones. About 99% of the mobile phones being used in India are being manufactured domestically. Once the new scheme for electronics component manufacturing gets approved, the ratio of Indian components in mobiles and other electronics devices will rise. The overarching aim is to develop a sustainable electronic components manufacturing ecosystem.
In the 99% of the indigenously produced mobiles, which are being sold to the Indian consumers, what kind of value addition is being done domestically?
Today the value addition taking place in India is about 15% to 20%, in certain areas of electronics manufacturing. The important thing is that this value addition, being done in India, consists of the most labour intensive components. This means that the employment generation is quite significant. The large number of jobs that are being created is a desirable aspect of the value addition in electronics components that we are doing. Going forward, we intend to further deepen the value addition. We intend to take it up to 35% to 40%. Doing 100% value change addition is not possible or even desirable. No country, not even China, manufactures 100% components. Electronics has a global value chain, in which production takes place across international boundaries. We intend to develop Indian manufacturing capacities to the extent that the country becomes a significant global player in the electronics space. How much credit would you give to the PLI schemes for enabling the country to produce 99% of its mobile requirements domestically?
The PLI for the largescale electronics manufacture, which basically covers mobile phones, is now basically one of the most successful PLIs in the country. We have achieved most of the targets that we have set for manufacturing, exports, and domestic consumption under the PLI scheme. Now the PLI for IT hardware manufacturers has just taken off. Under the PLI Scheme 2.0 for IT Hardware, a total 27 companies were approved with committed investment of ₹2,955 crore and committed production target of ₹3,51,647 crore.
You pointed out earlier that the government is focused on increasing the indigenous components in the mobiles being sold in India. Are you expecting more investments in the area of component manufacturing?
The goal is to take indigenous components, in not just mobiles but all electronics products, to about 40%. Currently the level is between 15% to 30%. The components are common across a range of products so if you achieve up to 40% in mobiles, you will achieve a similar percentage in many other electronics products. As far as more investments are concerned, since the economy is growing and there is a rise in demand, more companies will be interested in investing in setting up new manufacturing facilities. But even if large investments come in, the actual production starts a bit later. So to have growth in the present, you have to ensure that the existing facilities are geared to work at their full capacity.
It has been reported in the media that the Ministry of Electronics and Information Technology has accelerated the empanelment of agencies to provide AI compute and services for the India AI Mission? With this initiative what kind of transformation can we expect in India’s AI ecosystem?
With this initiative, we aim to develop a scalable AI computing ecosystem with 10,000 GPUs. This ecosystem will be made available for startups, researchers, students, and academicians for AI Innovation and development. It is expected to pave the way, as AI technologies tend to do, in the direction of application development, and eventually towards the development of foundational models. In the India AI Mission there is a provision for developing foundational models. ChatGPT, which everyone is talking about, is essentially a foundation model. In India, we have to first of all determine the value that we can accrue by developing foundational models and then we have to work to develop it.
