HYDERABAD, INDIA: The Union Government is in the process of fine-tuning the new hardware policy which is likely to be announced within this month. A task force appointed for the hardware policy is in the process of finalising its guidelines as suggestions have been pouring in.

Alongside, the Union IT & Communications Ministry is working on a policy framework that would encourage creation of few IT clusters in the country.

Together, these clusters and semiconductor manufacturing companies, would play a larger role in sync for the country's semiconductor ecosystem, according to M. Madhavan Nambiar, Additional Secretary, Ministry of Communications, Government of India.

There is considerable interest for investments in India and already over $20 billion of investments have been committed in the areas of electronics, hardware and manufacturing in this sector in the last two years and there continues to be heightened interest, Nambiar said.

Addressing participants at a meeting hosted by the Indian Semiconductor Association, Nambiar said that these clusters would be spread across 40-50 square km and it all depends on how various States respond to such an initiative. This would be a co-ordinated effort of the Central and State Governments.

Later speaking to newspersons, Nambiar said that the hardware manufacturing policy is aimed at bringing about convergence with the semiconductor policy and its guidelines announced recently.

Taiwan cos keen

Companies from Taiwan both hardware manufacturers and semiconductor companies have approached the Government expressing interest in setting up manufacturing bases in India and sought necessary support.

The Government was keen that this sector received the necessary encouragement and support so that all these projects could be taken up with public-private participatory model. 

"Our analysis of some of the countries such as Korea, China and Japan had shown that all of them have grown with the support on incentives and infrastructure developed by the Government and we need to do the same to this sector," he said.

The electronics market is projected to grow to over $320 billion by 2015 and has the potential to far outpace the oil import bill. Therefore, this presents a case of rapid development of the electronics and manufacturing hardware in the country, he said.

Poornima Shenoy, ISA President, said that after the recent policy announcement for semiconductor industry, there has been positive response as there is potential for manufacturing in India. The semiconductor revenues have gone up from $2.69 billion in 2006 and is poised to touch $5.49 by 2009.

Representatives from the semiconductor industry also highlighted how companies in Taiwan, for instance, have access to cheaper working capital at about 2 per cent interest as against 13 per cent in India.