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Follow UsNEW DELHI, INDIA: The semiconductor scene in India is logging on to greater growth. Riding on the unprecedented demand for products such as set-top boxes, mobile phones and storage flash memory, it is expected that the market for semiconductors in India is expected to grow to $7.59 billion by 2010.
An agency report added that semiconductor manufacturing has been limited to pockets of excellence. Though policy changes and a slew sops have come about in abundance, there has been a failure to create an ecosystem for nurturing electronics manufacturing within the country, according to the 2008-10 market update from the India Semiconductor Association (ISA) and consulting firm Frost & Sullivan.
According to a wishlist to the Finance Minister, the ISA complained there is no financial incentive or motivation to manufacture electronic products in India despite having a mature design and software industry. It has been pointed out that local electronic manufacturing in India offers a $20 billion plus investment opportunity in India over the next 3-5 years.
Calling up the government to accord special incentives for the sector, including reduction in the excise duty on local electronic manufacturing to 4 per cent from 8 per cent to cover inefficiencies of local manufacturing, the ISA said the government should also look at progressively increasing tax credits for higher value addition in the form of local manufacturing done from CBU to SKD to component level.
There is a trading mentality among entrepreneurs thanks to the inverted duty structure which makes it more attractive to import end-products than take up domestic manufacturing, the document noted.
The ISA has also called for tweaking the STPI and SEZ scheme to suit the fables semiconductor companies.
Pointing out that the National Semiconductor Policy, which aimed at creating a complete semiconductor ecosystem in the country, ISA said that the policy has managed only to attract solar photovoltaic players. But in this respect, there is much to be desired for.