Govt to draft new electronics manufacturing policy: PM

CHENNAI: To make the electronics and IT hardware industry more competitive, the government will soon come out with an electronics and IT hardware manufacturing policy, PM Manmohan Singh said on Saturday.

Speaking at the inauguration of the Flextronics manufacturing facility at Sriperumbudur, he said the growth seen in mobile phones could now be expected in other sectors such as PCs and DTH television networks.

The government would follow a forward looking policy regime that would continue to encourage this sector and promote new investment, create new employment.

Tariffs on 217 IT items would be reduced to zero percent as agreed at the WTO. This would promote greater competition which in turn would help the development of the country's electronics industry, he said.

The government is also planning to set up a Mission on Vocational Education to meet the shortage of skilled employees in the IT and electronics sectors.

A study conducted by the Indian Semiconductor Association had indicated that the Indian electronics and IT market would grow from US$ 28 billion to US$ 363 billion by 2015. A major part of this would be hardware including semiconductor chips.

President and MD of Flextronics Asia Peter Tan said Flextronics had set up its industrial park on 250 acres of land in the SEZ at Sriperumbudur.

In the first phase, two buildings were being set up on half a million sq ft of area. The first building was ready while the second one would be completed early next year. Manufacturing would commence in December this year.

The facility will manufacture cellphones, telecom infrastructure products and mechanicals for base stations for OEM customers who would provide designs for cellphones.

Cellphones would be primarily of the GSM model and cater mainly to the requirements of the domestic market. Flextronics CEO Michael McNamara said one million cellphones were expected to be manufactured per month and the present capacity of two buildings was sufficient to meet customer needs for the next one and a half years.

In Phase I, the investment on the facility is expected to be US$ 200 million. McNamara added that the headcount in the Chennai facility would be 1,000 employees and the company was in discussion with vendors for setting up their facilities around the Flextronics plant.

After the first year, the facility is expected to cater to the requirements of markets in Europe, the Middle East and Africa. The company is expecting six different customers in the first six months of its operation at Chennai, according to McNamara.

Also present at the inauguration ceremony were Tamil Chief Minister M Karunanidhi, Chairperson UPA, Sonia Gandhi and Union Communications and Information Technology Minister Dayanidhi Maran.

© CIOL Bureau