In the Production Linked Incentive scheme for white goods segment announced by the Cabinet with an approved financial outlay of Rs 6,238 crore over five years, the air conditioner industry has major potential. While the budgetary level allocations have been approved by the Cabinet, details on guidelines and scheme are still awaited and are expected to be announced in a month or two. "How do we take this industry from a current level of Rs 16,000 crore to Rs 1 lakh crore in next nine years? Out of this 35 per cent should be coming out of exports, and the remaining from domestic consumption," says Manish Sharma, President & CEO, Panasonic India, and Chairperson, FICCI Electronics & White Goods Manufacturing Committee.

The conversation around the PLI scheme for air conditioners started in the month of May last year and a couple of weeks later, the government and industry came together to initially chart out a strategy to enable three important objectives in the air conditioner industry.

"The first objective is to manufacture in India. And I say, not assemble, but manufacture. Currently, a lot of product components still come from elsewhere. The first idea is to go beyond assembling products. For example, before the ban on refrigerants fitted air conditioners was imposed, 1.5 million units of ACs were coming from elsewhere, which was almost 30 per cent of the total ACs sold in the country, whereas 70 per cent was getting produced in the country," says Sharma.

Further analysis revealed that value addition in air conditioners is very low, at just about 25 per cent. While many manufacturers draw copper wires and aluminum foils, manufacture heat exchangers, do sheet metals and molding in the factory and then produce air conditioners, the material components such as aluminum, copper, PCB, compressor, motors among other materials are sourced from elsewhere. "That is why the second objective is to take the current value addition of 25 per cent to 75 per cent in the next 5 years and backward integrate," adds Sharma.

The third and the most important objective is to make India competitive on the global scale in terms of cost, quality standards, and delivery benchmarks set by some of the competing nations.

"The issue today is that the market size in India for air conditioners is just about 7.5 million units. China is 120 million units, and out of this they export 50 million units. Even with a similar population (of course, the differential is the per capita income) we have to go a long way. I think it's the responsibility of multinational companies to ensure that they establish the global supply chain footprint in the country. And that is our objective too - to make India the export destination," says Sharma.

Panasonic India has been manufacturing air conditioners at its manufacturing plant in Jhajjar, Haryana. While the company has been exporting ACs from the facility, it intends to scale exports going forward.

Consumer electronics major Panasonic India is aiming to double its residential airconditioning business in the next three years as it is betting big on new cutting age technologies along with growing demand, a top company official said.

The company, which on Thursday introduced HU series of ACs with the recently-announced nanoeX technology, is eyeing about 35 per cent sales growth in the segment this year on the back of pent-up demand.

According to the company, nanoeX technology releases hydroxyl radicals contained in water, which are also known as "nature's detergent" that are capable of inhibiting bacteria and viruses, including 99.99 per cent of adhered novel coronavirus.

Panasonic ACs are also equipped with Artificial Intelligence (AI) and internet of things (IoT) platform Miraie as well as intelligent sensors Econavi, which detect unconscious waste of energy.

"Our intention in AC business is very clear, we want to democratise the technology to as much as possible," Panasonic India and South Asia President and CEO Manish Sharma told reporters at the firm's virtual launch event.

Last year, Panasonic had launched its Miraie platform and introduced connected technology across its inverter ACs portfolio with smart features.

"This year again, we have the intention to adopt technology and provide it to a wider range. The intention is to double the AC business in the next three years time," he said.

The company has gone for faster adoption of nanoeX technology and help people fight the pandemic, he added.

Sharma also anticipates pent-up demand in the room AC segment as last year the lockdown was imposed in the middle of the summer season.

"There would be a pent up demand, I assume that it would be 10 to 15 per cent of the total demand of the upcoming summer. In that situation, hopefully, the industry may grow about 20 per cent and our intention is to grow 35 per cent utilising the three proprietary technology which is nanoeX, Miraie and Econavi," he added.

Currently, air conditioners account for nearly 40 per cent of Panasonic India's overall consumer durables business and 15 per cent of the overall sales.

"I believe there is huge potential for air conditioner growth in India with current penetration being at 5-6 per cent.

"The AC industry is growing at double-digit CAGR and consumers are looking for energy-efficient products with a lower total cost of ownership. At Panasonic, we are witnessing a faster adoption of inverter ACs," Sharma added.

The company, which has an installed capacity of one million units of room ACs at its Jhajjar, Haryana-based plant, plans to add more shifts to remove bottlenecks and meet increased demand.

Asked whether Panasonic would opt for the benefits offered under the production-linked incentive (PLI) scheme for manufacturing residential ACs, Sharma, who also heads the Electronic & White Goods Manufacturing Committee of FICCI, said work is still in progress from the government's side and deliberations are going on.

Panasonic is committed to the government's agenda to bring self-reliance into the country, he added.

"Panasonic is already exporting AC and many other products from India to several countries and we are now collaborating with the component manufactures specially focussing on three components -- motors, compressors and aluminium coils," he said, adding Panasonic's commitment towards 'Make in India' was intact.

The company is in discussions with component makers to scale up and hence add more value.

"You would see (results) in two-three years of time, in a phased manner," Sharma added.

The Indian residential market is estimated to be around 7.5 million units per annum and is witnessing double digit annual growth, Panasonic India Business Head, Air Conditioners Group Gaurav Sah said.

Consumer electronics major Panasonic NSE 0.98 % India is aiming to double its residential air-conditioning business in the next three years as it is betting big on new cutting age technologies along with growing demand, a top company official said.

The company, which on Thursday introduced HU series of ACs with the recently-announced nanoeX technology, is eyeing about 35 per cent sales growth in the segment this year on the back of pent-up demand.

According to the company, nanoeX technology releases hydroxyl radicals contained in water, which are also known as "nature's detergent" that are capable of inhibiting bacteria and viruses, including 99.99 per cent of adhered novel coronavirus.

Panasonic ACs are also equipped with Artificial Intelligence (AI) and internet of things (IoT) platform Miraie as well as intelligent sensors Econavi, which detect unconscious waste of energy.

"Our intention in AC business is very clear, we want to democratise the technology to as much as possible," Panasonic India and South Asia President and CEO Manish Sharma told reporters at the firm's virtual launch event.

Last year, Panasonic had launched its Miraie platform and introduced connected technology across its inverter ACs portfolio with smart features.

"This year again, we have the intention to adopt technology and provide it to a wider range. The intention is to double the AC business in the next three years time," he said.

The company has gone for faster adoption of nanoeX technology and help people fight the pandemic, he added.

Sharma also anticipates pent-up demand in the room AC segment as last year the lockdown was imposed in the middle of the summer season.

"There would be a pent up demand, I assume that it would be 10 to 15 per cent of the total demand of the upcoming summer. In that situation, hopefully, the industry may grow about 20 per cent and our intention is to grow 35 per cent utilising the three proprietary technology which is nanoeX , Miraie and Econavi," he added.

Currently, air conditioners account for nearly 40 per cent of Panasonic India's overall consumer durables business and 15 per cent of the overall sales.

"I believe there is huge potential for air conditioner growth in India with current penetration being at 5-6 per cent.

"The AC industry is growing at double-digit CAGR and consumers are looking for energy-efficient products with a lower total cost of ownership. At Panasonic, we are witnessing a faster adoption of inverter ACs," Sharma added.

The company, which has an installed capacity of one million units of room ACs at its Jhajjar, Haryana-based plant, plans to add more shifts to remove bottlenecks and meet increased demand.

Asked whether Panasonic would opt for the benefits offered under the production-linked incentive (PLI) scheme for manufacturing residential ACs, Sharma, who also heads the Electronic & White Goods Manufacturing Committee of FICCI, said work is still in progress from the government's side and deliberations are going on.

Panasonic is committed to the government's agenda to bring self-reliance into the country, he added.

"Panasonic is already exporting AC and many other products from India to several countries and we are now collaborating with the component manufactures specially focussing on three components -- motors, compressors and aluminium coils," he said, adding Panasonic's commitment towards 'Make in India' was intact.

The company is in discussions with component makers to scale up and hence add more value.

"You would see (results) in two-three years of time, in a phased manner," Sharma added.

The Indian residential market is estimated to be around 7.5 million units per annum and is witnessing double digit annual growth, Panasonic India Business Head, Air Conditioners Group Gaurav Sah said.

After successfully introducing Production Linked Incentive (PLI) scheme for promoting mobile phone manufacturing in India, the cabinet has approved the PLI scheme for 10 key sectors for enhancing India's manufacturing capabilities and enhancing exports. The sectors include electronic or technology products, Advance Chemistry Cell (ACC) battery manufacturing, automobile and auto components, pharmaceuticals, telecom products, amongst others. "The announcement of PLI scheme for ten sectors by the government today is a major boost for the manufacturing sector," said Dr Sangita Reddy, President, FICCI.

To be implemented by Ministry of Electronics and Information Technology, the PLI scheme for electronic or technology products include semiconductor fab, display fab, laptops, servers, IoT devices and specified computer hardware, with an approved financial outlay of Rs 5,000 crore over a five-year period.

"The Indian government's decision to introduce PLI for laptops is timely and in the right direction. We are confident that it will encourage local manufacturing and further bolster the local PC market, which is already seeing a positive momentum under the current work and learn from home scenarios. Lenovo is committed to local manufacturing with our plant in Puducherry, and we welcome this move by the government," said Rahul Agarwal, CEO and MD, Lenovo India

White goods including ACs and LEDs would fall under the Department for Promotion of Industry and Internal Trade with the approved financial outlay of Rs 6,238 crore for a period of five years. Manish Sharma, President & CEO, Panasonic India & SA and Chairperson FICCI Electronics Manufacturing Committee, tweeted, "This is a game changer! PLI for strategic sectors approved by government! @ficci_india is thankful to the government and industry stands committed. Will enable following: competitive domestic production, faster backward integration and scale up exports #AatmaNirbharBharat."

According to the press release issued by the ministry, the final proposals of PLI for individual sectors will be appraised by the Expenditure Finance Committee (EFC) and approved by the Cabinet. Savings, if any, from one PLI scheme of an approved sector can be utilised to fund that of another approved sector by the Empowered Group of Secretaries. Any new sector for PLI will require fresh approval of the Cabinet.

Prime Minister's clarion call for an 'Aatmanirbhar Bharat' envisages policies for the promotion of an efficient, equitable and resilient manufacturing sector in the country. Growth in production and exports of industrial goods will greatly expose the Indian industry to foreign competition and ideas, which will help in improving its capabilities to innovate further.

Industry body FICCI congratulates Minister for Electronics & IT Ravi Shankar Prasad for unveiling the guidelines of three new schemes for the development of electronics manufacturing and its ecosystem in India.

These schemes are Production Linked Incentive Scheme (PLI), Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.

FICCI welcomes this forward looking, timely and bold policy initiative. It is the surest step forward to shift supply chains in one of the fastest growing sectors of the world to India.

We expect India to become a leading exporter for mobile phones to the world by 2023. The schemes will also help pull in manufacturing of components, sub-assemblies and eventually core technologies, it said.

"It is a historic day for Indian electronics industry. The scheme would not only integrate Indian electronics industry with the global supply chain and building robust manufacturing ecosystem but also help in creating more employment in the country," said Som Mittal, Mentor, FICCI Electronics Manufacturing Committee.

Manish Sharma, Chair, FICCI Electronics Manufacturing Committee further added, "The roadmap launched today of the Rs 50,000 crore incentive schemes by Minister, Ravi Shankar is encouraging for the electronics industry. This initiative is a progressive step towards 'Make in India' helping us achieve the Honorable PM's vision of Atmanirbhar Bharat.”

He added that collectively the schemes - PLI, EMC 2.0 and SPECS will help scale up the component ecosystem and generate employment.

We believe, the electronics industry in India can increase its potential multi-fold by 2025, with backward integration. It is important that we leverage the current times to explore new geographies for expanding the demand domain through exports with stability in policies and agility in approach, he said.

The authorities’s electronics manufacturing schemes introduced on Tuesday will appeal to extra international gamers in the long term and meet the targets underneath the National Policy on Electronics (NPE) 2019, mentioned numerous trade our bodies.

The authorities launched three schemes - Production Linked Incentive Scheme (PLI), Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme - with an outlay advantage of ₹50,000 crore to the producers.

“The mobile manufacturing industry is very positive about the move and this scheme will help meet the targets under NPE 2019. This will certainly lead to companies moving their supply chains to India. This will not only spur manufacturing but will make India an export-led global manufacturing hub for mobile phones,” Nitin Kunkolienker, President- Manufacturers` Association For Information Technology (MAIT) mentioned.

He mentioned that the interruption within the international provide chain as a result of coronavirus pandemic provides India a chance to extend export-led manufacturing and broadening the scope of PLI to all different main sectors of electronics like client electronics, ICT, CPE merchandise, computer systems and medical electronics shall be a game-changer.

“This initiative is a progressive step towards ‘Make in India’ helping us achieve the Prime Minister’s vision of ‘Aatmanirbhar Bharat’. Collectively the schemes – PLI, EMC 2.0 and SPECs will help scale up the component ecosystem and generate employment,” Manish Sharma, Chair, FICCI Electronics and Manufacturing Committee, mentioned.

Sharma, who can be the President and CEO Panasonic India, mentioned that the electronics trade in India can improve its potential multi-fold by 2025, with backward integration fostering native manufacturing of PCBs and ATMPs.

“It is important that we leverage the current times to explore new geographies for expanding the demand domain through exports with stability in policies and agility in approach,” he added.

India Cellular and Electronics Association (ICEA) mentioned that schemes will assist the federal government’s imaginative and prescient to determine India because the world’s primary cellular handset manufacturing vacation spot standing.

The government's electronics manufacturing schemes announced on Tuesday will attract more global players in the long run and meet the targets under the National Policy on Electronics (NPE) 2019, said various industry bodies.

The government introduced three schemes - Production Linked Incentive Scheme (PLI), Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme - with an outlay benefit of ₹50,000 crore to the manufacturers.

“The mobile manufacturing industry is very positive about the move and this scheme will help meet the targets under NPE 2019. This will certainly lead to companies moving their supply chains to India. This will not only spur manufacturing but will make India an export-led global manufacturing hub for mobile phones,” Nitin Kunkolienker, President- Manufacturers` Association For Information Technology (MAIT) said.

He said that the interruption in the global supply chain due to the coronavirus pandemic gives India an opportunity to increase export-led manufacturing and broadening the scope of PLI to all other major sectors of electronics like consumer electronics, ICT, CPE products, computers and medical electronics will be a game-changer.

“This initiative is a progressive step towards ‘Make in India’ helping us achieve the Prime Minister's vision of 'Aatmanirbhar Bharat'. Collectively the schemes – PLI, EMC 2.0 and SPECs will help scale up the component ecosystem and generate employment,” Manish Sharma, Chair, FICCI Electronics and Manufacturing Committee, said.

Sharma, who is also the President and CEO Panasonic India, said that the electronics industry in India can increase its potential multi-fold by 2025, with backward integration fostering local production of PCBs and ATMPs.

“It is important that we leverage the current times to explore new geographies for expanding the demand domain through exports with stability in policies and agility in approach,” he added.

India Cellular and Electronics Association (ICEA) said that schemes will help the government's vision to establish India as the world's number one mobile handset manufacturing destination status.

The Union Ministry of Electronics and Information Technology (MeitY) has urged the Union Ministry of Home Affairs (MHA) to consider broadening the definition of essential goods and include information and communications technology (ICT) products while deferring to a plea from the mobile manufacturing industry.

On Wednesday, IT minister Ravi Shankar Prasad said that the ministry has taken note of mobile manufacturers’ concerns and has drawn the MHA authorities’ attention to them. The minister made the statement after holding a meeting with industry players, associations, and chambers of the electronics goods market.

The mobile manufacturing industry, which is staring at an estimated loss of over Rs 20,000 crore because of the coronavirus disease (Covid-19) pandemic, has urged the MeitY for broadening the definition of essential goods in a bid to allow online and offline sales of mobile device and networking products.

They have also pleaded with the ministry that all authorised sales and service centres of all electronics goods be allowed to resume their services.

Pankaj Mohindroo, chairman of the Indian Cellular & Electronics Association (ICEA), said that the industry is facing a severe crisis due to the viral outbreak. “The industry is in deep trouble. Production losses are estimated to be around Rs 20,000 crore. All companies’ plants are closed. Exports losses have gone up to Rs 2,500 crore and 2.5 crore mobile phones are lying unrepaired. Our meeting with the minister ended on a note of cautious optimism. Hopefully, the government will take immediate action by including the mobile manufacturing industry as an integral part of essential goods,” Mohindroo said.

Prasad announced during the meeting that Aarogya Setu, a Covid-19 tracking mobile application developed by the MeitY’s National Informatics Centre, has been downloaded a record eight crore times. The minister said that electronics factories should be opened in a calibrated manner.

Prasad has asked the electronics goods companies to ramp up production of medical electronics such as ventilators because of the equipments growing demand to treat Covid-19 patients. He also urged the IT sector to take advantage of three new government schemes that would be launched soon to attract global investments and strengthen the industry in a post-Covid-19 world.

“The minister said that the country’s domestic demand is going to be huge, as the lockdown restrictions have increased people’s dependence to transact via the digital medium. He asked the industry to increase exports to cater to growing global demands,” said an official, who was present at the meeting.

Industry players told Prasad that major electronics manufacturing clusters in Noida, Greater Noida, Maharashtra, Tamil Nadu, and Andhra Pradesh are facing local restrictions because of their presence in high-risk Covid-19 zones. Prasad, however, allayed their concerns and told them that he has already had a word with respective states seeking their cooperation.

Mobile phone manufacturers such as Apple, Samsung, Xiaomi, Foxconn, Lava, Wistron, Oppo, Flex, Sterlite, Micromax, Deki Electronics, Tejas Networks Ltd, and, Panasonic, etc., attended Wednesday’s meeting, which took place a day after Prasad held talks with all his state counterparts.

Industry bodies, including the ICEA, Manufacturers Association for Information Technology (MAIT), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI), Associated Chambers of Commerce and Industry of India (ASSOCHAM), Internet and Mobile Association of India (IAMAI), Association of Indian Medical Device Industry (AiMeD), Telecom Equipment Manufacturers Association of India (TEMA), Ph.D. Chambers, and Indian Telephone Industry Limited (ITI), among others, also attended the meeting.

Ravi Shankar Prasad, the Union Minister of Law and Justice, Communications, Electronics and Information Technology, assured industry leaders through a video conference meeting that requests regarding broadening the definition of essential goods to ICT products, retail or online sale of ICT essential goods, authorized sales, and Services of ICT essential goods has already been taken up with Ministry of Home Affairs (MHA).

The IT industry had stated to DQ Channels earlier this month that since over 80 percent of IT professionals are working from home, the government must bring mobile phones, laptops, tablets and other ICT products under essentials so that their work doesn’t endure hindrance due to lack of equipment. Several industry associations such as ICEA, MAIT, and FAIITA had voiced their opinion and had requested the government to consider their plea.

Apart from the ICT products issue, the Union Minister also asked the Electronics Industry to explore new opportunities that are arising out of the adversity to ensure the country becomes the global hub of electronics manufacturing. He also encouraged industries to attract global investment and strengthen the sector.

The meeting was attended by premier associations of the country such as MAIT, ICEA, ELCINA, IESA, CEAMA, IPCA, ELCOMA, FICCI, ASSOCHAM, AiMED, TEMA), PhD Chambers, and ITI. Apart from associations, industry leaders from the mobile, electronics and telecom sectors such as Apple, Samsung, Xiaomi, Foxconn, Lava, Wistron, Oppo, Flex, Sterlite, Micromax, Panasonic, etc. also attended the meeting.

Prior to the meeting with industry leaders, Ravi Shankar Prasad also extended the relaxation in terms and conditions for virtual private network (VPN) until 31 July 2020 to facilitate work-from-home for Other Service Providers (OSPs) and the IT industry on the whole after consultation with state IT ministers. This move has received appreciation from the industry.

“The Government’s decision to further extend WFH rules for the IT/ITES sector comes as a relief to the workforce and is well-lauded by Avaya as the nation moves ahead to fight the pandemic. Avaya is enabling tens of thousands of remote agents to work remotely ensuring business continuity and economic stabilization in the face of challenges brought down by the pandemic especially to the Indian BPO industry/Other Service Providers (OSP),” said Vishal Agrawal, MD, Avaya India and SAARC.

Indian business referred to as upon the federal government to permit a graded opening of enterprise operations together with a stimulus bundle to get the financial system again on monitor with the nationwide lockdown slated to finish on Three Might.

The curbs are unlikely to be lifted fully, with many components nonetheless labelled covid pink zones, however business leaders stated it was vital to permit factories to restart even when at a fraction of their capacities.

“We hope that the federal government will announce a fiscal stimulus bundle quickly to maneuver to a ‘V’-shaped restoration. India’s stimulus bundle to this point is simply 0.8% of gross home product (GDP), and there’s adequate scope to extend assist measures,” stated Vikram Kirloskar, president of the Confederation of Indian Trade.

All sectors needs to be allowed to start with 1 / 4 of their workforce to allow social distancing, and authorities ought to facilitate a easy movement of products, he stated.

The federal government ought to unlock state-run warehouses with 80 million tonnes of grain to ship meals to the poor day by day and make direct transfers of ₹3,000-5,000 to Jan Dhan accounts as soon as a fortnight until June, Kirloskar stated. Banks ought to present loans masking salaries from April to June at an rate of interest of 4-5%, he stated.

“From lockdown to graded opening up, from frightened of covid to cautious of covid and assured we are able to beat it. Awaiting a optimistic #LifeAfterLockdown with authorities stimulus bundle,” Sangita Reddy, president of the Federation of Indian Chambers of Commerce and Trade (FICCI) tweeted on Thursday.

The central and state governments want to indicate flexibility to allow factories to work 12-hour shifts wherever doable, stated Sanjay Bhatia, president of FICCI’s medium and small enterprises panel. Most states are permitting factories to work in a single shift towards the standard three shifts.

“Interstate or interdistrict motion of shopper durables is restricted. We’re requesting totally different ministries that motion of durables and electronics be labeled as necessities,” stated Manish Sharma, president and CEO of Panasonic India and chairperson of FICCI’s panel on electronics and manufacturing.

Prime executives need the federal government to come back out with clear tips on motion of products. “The federal government additionally wants to consider how public transportation might be opened up,” stated Rampraveen Swaminathan, managing director and CEO, Mahindra Logistics, a third-party logistics supplier.

Trade needs to be allowed to operate with out hindrance in protected zones and with minimal curbs in areas that aren’t affected a lot, stated Deepak Sood, secretary common of the Related Chambers of Commerce and Trade. “We have to guarantee a minimal stage of continuity in operations,” he stated.

Industries have been getting ready to make sure social distancing, however manpower-intensive companies will take days to revive normalcy, Sood stated.

The Indian industry has called on the government to allow a gradual opening of business operations along with a stimulus package to bring the economy back on track with the country lockdown ending on 3 May.

The curves may never be fully lifted, with many parts marked with red zones, but industry leaders say it is important to allow factories to recover even at some point in the certain capacities.

“We expect the government to announce a stimulus package to move towards a ‘V-shaped recovery. India’s stimulus package so far accounts for only 0.8% of gross domestic product (GDP), and is adequate measure to increase support levels, ”said Vikram Kirloskar, president of the Confederation of Indian Industry.

All sectors should be allowed to start one-quarter of their workforce to improve social mobility, and authorities should facilitate a smooth transport of goods, he said.

The government should open state-run warehouses containing 80 million tonnes of grain to provide food to the poor daily and make direct transfers of ₹ 3,000-5,000 to Jan Dhan’s accounts twice through June. , Kirloskar said. Banks should offer loans that cover salaries from April to June at an interest rate of 4-5%, he said.

“From locking graded openings, from covid fears to covid safeguards and confident we can beat them. Waiting for a positive #LifeAfterLockdown with a package of government stimulus,” Sangita Reddy, president of the Federation of Indian Chambers of Commerce and Industry (Ficci) tweeted on Thursday.

Central and state governments must show urgency to adapt factories to work 12-hour shifts everywhere, said Sanjay Bhatia, chair of Ficci’s medium and small panel. Most states allow factories to operate in one shift over the usual three shifts.

“The interstate or interdistrict movement of consumer durables is limited. We ask different ministers that the movement of durables and electronics be classified as essential,” said Manish Sharma, president and CEO of Panasonic India and chair of the Panasonic India panel Ficci in electronics and manufacture.

Leading executives want the government to come out with clear instructions on how to move things forward. “The government must also consider how public transportation is opened,” said Rampraveen Swaminathan, managing director and CEO, Mahindra Logistics, a third-party logistics provider.

The industry should be allowed to operate without barriers to safe zones and have minimum curves in unaffected areas, said Deepak Sood, secretary general of the Associated Chambers of Commerce and Industry. “We need to ensure a minimum level of continuity in operations,” he said.

Industries are preparing to ensure social mobility, but businesses with the intention of human energy can take days to restore normalcy, says Sood.

Union Electronics and Information Technology Minister Ravi Shankar Prasad on Wednesday exhorted the electronics industry to explore the new opportunities that are arising out of adversity and make the country the global hub of electronics manufacturing.

During a meeting with electronics industry associations, chambers and prominent industry players, Prasad asked the electronics industry to take advantage of the opportunity and new schemes notified by the ministry, attract global investment and strengthen the sector. He emphasised the role of the medical electronics industry that is at a point of a complete turnaround.

The ministry officials presented the current Covid-19 situation and it was announced that the Aarogya Setu app has reached around 8 crore mobile phones in the country.

The efforts made by the the ministry to handle the situation in the short term, medium term & long term perspective to minimise the effect of Covid-19 were presented during the meeting.

It was also mentioned that major electronics manufacturing clusters are facing local restrictions because of their presence in high risk zones like Noida, Greater Noida, Maharashtra, Tamil Nadu, Andhra Pradesh.

Officials also appreciated the support received from the industry in formulation of new schemes for promotion of electronics industry and SOP Guidelines for Covid-19.

The Union Minister apprised the industry that the requests regarding broadening the definition of essential goods to ICT products, retail/online sale of ICT essential goods, authorised sales and services of ICT essential goods has already been taken up with the Ministry of Home Affairs.

Under the newly notified schemes of the MeitY to promote electronics manufacturing, the Central government will provide a financial support of Rs 50,000 crore for ESDM industry. Further, he mentioned that MeitY's initiatives like Aarogya Setu, Aadhar, Digital payments etc. have played a very important role in fighting against Covid-19.

Industry representatives presented the "Restart, Restore and Resurgence" model to capture the global opportunity in the Electronics System Design and Manufacturing (ESDM) sector.

The majority of the participants appreciated the new trilogy of schemes of MeitY, namely, PLI, SPECS and EMC2.0; to support the electronics manufacturing sector. Industry raised various issues related to working of factories, logistics, export, supply chain disruption and demand shock due to Covid-19.

Prasad instructed the ministry officials to extend full support to the industry and liaison with states/UTs for reopening of electronics manufacturing facilities.

The meeting was attended by major associations i.e. Manufacturers Association for Information Technology (MAIT), Indian Cellular & Electronics Association (ICEA), Electronic Industries Association of India (ELCINA), India Electronics & Semiconductor Association (IESA), Consumer Electronics & Appliances Manufacturers Association (CEAMA), Indian Printed Circuit Association (IPCA), Electric Lamp and Components Manufacturers Association of India (ELCOMA), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI), Associated Chambers of Commerce and Industry of India (ASSOCHAM), Internet and Mobile Association of India (IAMAI), Association of Indian Medical Device Industry (AiMED), Telecom Equipment Manufacturers Association of India (TEMA), PhD Chambers, and Indian Telephone Industry Ltd (ITI).

It was also attended by various Industry leaders in mobile, consumer electronics, telecom and other segments of electronics manufacturing such as Apple, Samsung, Xiaomi, Foxconn, Lava, Wistron, Oppo, Flex, Sterlite, Micromax, Deki Electronics, Tejas Networks Ltd, Panasonic.

Union Minister of Electronics and Information Technology Shri Ravi Shankar Prasad exhorted the Electronics Industry to explore the new opportunities that are arising out of the adversity and make the country the global hub of electronics manufacturing. During a meeting with Electronics Industry Associations, Chambers and prominent Industry players, he requested the electronics industry to take advantage of the opportunity and new Schemes notified by the Ministry, attract global investment and strengthen the sector. He emphasized the role of Medical Electronics Industry that is at a point of a complete turnaround.

The ministry officials presented the current COVID-19 situation & Aarogya Setu platform and thanked the mobile industry for their support in making the Aarogya Setu app reach around 8 crore mobile phones in the country. The efforts made by Ministry to handle the situation in the short term, medium term & long term prospective to minimize the effect of COVID-19 were presented during the meeting. It was also mentioned that major electronics manufacturing clusters are facing local restrictions because of their presence in high risk zones like Noida, Greater Noida, Maharashtra, Tamil Nadu, Andhra Pradesh etc. Officials also appreciated the support received from the Industry in formulation of new Schemes for promotion of electronics industry and SOP Guidelines for COVID-19.

Union Minister apprised the Industry that the requests regarding broadening the definition of essential goods to ICT products, retail /online sale of ICT essential goods, authorized sales and Services of ICT essential goods has already been taken up with Ministry of Home Affairs. Under the newly notified schemes of MeitY to promote electronics manufacturing, Government of India will provide a financial support of Rs 50,000 crore for ESDM industry. Further, he mentioned that MeitY’s initiatives like Aarogya Setu, Aadhar, Digital payments etc. have played a very important role in fighting against COVID-19.

Industry representatives presented “Restart, Restore and Resurgence” model to capture the global opportunity in Electronics System Design and Manufacturing (ESDM) sector. Majority of the participants appreciated the new trilogy of schemes of MeitY, namely, PLI, SPECS and EMC2.0; to support the electronics manufacturing sector. Industry raised various issues related to working of factories, logistics, export, supply chain disruption and demand shock due to COVID-19.

Union Minister instructed the ministry officials to extend full support to the Industry and liaison with states/ UTs for reopening of electronics manufacturing facilities.

The meeting was attended by major Associations i.e. Manufacturers Association for Information Technology (MAIT), Indian Cellular & Electronics Association (ICEA), Electronic Industries Association of India (ELCINA), India Electronics & Semiconductor Association (IESA), Consumer Electronics & Appliances Manufacturers Association (CEAMA), Indian Printed Circuit Association (IPCA), Electric Lamp and Components Manufacturer’s Association of India (ELCOMA), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI), Associated Chambers of Commerce and Industry of India (ASSOCHAM), Internet and Mobile Association of India (IAMAI), Association of Indian Medical Device Industry (AiMED), Telecom Equipment Manufacturers Association of India (TEMA), PhD Chambers, Indian Telephone Industry Limited (ITI). It was also attended by various Industry leaders in mobile, consumer electronics, telecom and other segments of electronics manufacturing such as Apple, Samsung, Xiaomi, Foxconn, Lava, Wistron, Oppo, Flex, Sterlite, Micromax, Deki Electronics, Tejas Networks Ltd, Panasonic etc.

Union Minister of Electronics and Information Technology Shri Ravi Shankar Prasad exhorted the Electronics Industry to explore the new opportunities that are arising out of the adversity and make the country the global hub of electronics manufacturing. During a meeting with Electronics Industry Associations, Chambers and prominent Industry players, he requested the electronics industry to take advantage of the opportunity and new Schemes notified by the Ministry, attract global investment and strengthen the sector. He emphasized the role of Medical Electronics Industry that is at a point of a complete turnaround.

The ministry officials presented the current COVID-19 situation & Aarogya Setu platform and thanked the mobile industry for their support in making the Aarogya Setu app reach around 8 crore mobile phones in the country. The efforts made by the Ministry to handle the situation in the short term, medium term & long term perspective to minimize the effect of COVID-19 were presented during the meeting. It was also mentioned that major electronics manufacturing clusters are facing local restrictions because of their presence in high-risk zones like Noida, Greater Noida, Maharashtra, Tamil Nadu, Andhra Pradesh etc. Officials also appreciated the support received from the Industry in the formulation of new Schemes for promotion of electronics industry and SOP Guidelines for COVID-19.

Union Minister apprised the Industry that the requests regarding broadening the definition of essential goods to ICT products, retail /online sale of ICT essential goods, authorized sales and Services of ICT essential goods have already been taken up with Ministry of Home Affairs. Under the newly notified schemes of MeitY to promote electronics manufacturing, Government of India will provide financial support of Rs 50,000 crore for the ESDM industry. Further, he mentioned that MeitY's initiatives like Aarogya Setu, Aadhar, Digital payments etc. have played a very important role in fighting against COVID-19.

Industry representatives presented the "Restart, Restore and Resurgence" model to capture the global opportunity in Electronics System Design and Manufacturing (ESDM) sector. Majority of the participants appreciated the new trilogy of schemes of MeitY, namely, PLI, SPECS and EMC2.0; to support the electronics manufacturing sector. Industry raised various issues related to working of factories, logistics, export, supply chain disruption and demand shock due to COVID-19.

Union Minister instructed the ministry officials to extend full support to the Industry and liaison with states/ UTs for reopening of electronics manufacturing facilities.

The meeting was attended by major Associations i.e. Manufacturers Association for Information Technology (MAIT), Indian Cellular & Electronics Association (ICEA), Electronic Industries Association of India (ELCINA), India Electronics & Semiconductor Association (IESA), Consumer Electronics & Appliances Manufacturers Association (CEAMA), Indian Printed Circuit Association (IPCA), Electric Lamp and Components Manufacturer's Association of India (ELCOMA), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI), Associated Chambers of Commerce and Industry of India (ASSOCHAM), Internet and Mobile Association of India (IAMAI), Association of Indian Medical Device Industry (AiMED), Telecom Equipment Manufacturers Association of India (TEMA), PhD Chambers, Indian Telephone Industry Limited (ITI). It was also attended by various Industry leaders in mobile, consumer electronics, telecom and other segments of electronics manufacturing such as Apple, Samsung, Xiaomi, Foxconn, Lava, Wistron, Oppo, Flex, Sterlite, Micromax, Deki Electronics, Tejas Networks Ltd, Panasonic etc.

Union Electronics and Information Technology Minister Ravi Shankar Prasad on Wednesday exhorted the electronics industry to explore the new opportunities that are arising out of adversity and make the country the global hub of electronics manufacturing.During a meeting with electronics industry associations, chambers and prominent industry players, Prasad asked the electronics industry to take advantage of the opportunity and new schemes notified by the ministry, attract global investment and strengthen the sector. He emphasised the role of the medical electronics industry that is at a point of a complete turnaround.The ministry officials presented the current Covid-19 situation and it was announced that the Aarogya Setu app has reached around 8 crore mobile phones in the country.The efforts made by the the ministry to handle the situation in the short term, medium term & long term perspective to minimise the effect of Covid-19 were presented during the meeting.It was also mentioned that major electronics manufacturing clusters are facing local restrictions because of their presence in high risk zones like Noida, Greater Noida, Maharashtra, Tamil Nadu, Andhra Pradesh.Officials also appreciated the support received from the industry in formulation of new schemes for promotion of electronics industry and SOP Guidelines for Covid-19.The Union Minister apprised the industry that the requests regarding broadening the definition of essential goods to ICT products, retail/online sale of ICT essential goods, authorised sales and services of ICT essential goods has already been taken up with the Ministry of Home Affairs.Under the newly notified schemes of the MeitY to promote electronics manufacturing, the Central government will provide a financial support of Rs 50,000 crore for ESDM industry. Further, he mentioned that MeitY’s initiatives like Aarogya Setu, Aadhar, Digital payments etc. have played a very important role in fighting against Covid-19.Industry representatives presented the “Restart, Restore and Resurgence” model to capture the global opportunity in the Electronics System Design and Manufacturing (ESDM) sector.The majority of the participants appreciated the new trilogy of schemes of MeitY, namely, PLI, SPECS and EMC2.0; to support the electronics manufacturing sector. Industry raised various issues related to working of factories, logistics, export, supply chain disruption and demand shock due to Covid-19.Prasad instructed the ministry officials to extend full support to the industry and liaison with states/UTs for reopening of electronics manufacturing facilities.The meeting was attended by major associations i.e. Manufacturers Association for Information Technology (MAIT), Indian Cellular & Electronics Association (ICEA), Electronic Industries Association of India (ELCINA), India Electronics & Semiconductor Association (IESA), Consumer Electronics & Appliances Manufacturers Association (CEAMA), Indian Printed Circuit Association (IPCA), Electric Lamp and Components Manufacturers Association of India (ELCOMA), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI), Associated Chambers of Commerce and Industry of India (ASSOCHAM), Internet and Mobile Association of India (IAMAI), Association of Indian Medical Device Industry (AiMED), Telecom Equipment Manufacturers Association of India (TEMA), PhD Chambers, and Indian Telephone Industry Ltd (ITI).It was also attended by various Industry leaders in mobile, consumer electronics, telecom and other segments of electronics manufacturing such as Apple, Samsung, Xiaomi, Foxconn, Lava, Wistron, Oppo, Flex, Sterlite, Micromax, Deki Electronics, Tejas Networks Ltd, Panasonic.

Appliances and consumer electronics industry may see 50 per cent decline in sales in April-June due to the lockdown, but a recovery is expected in the second quarter when festive sales begin, a top official of Panasonic India said.

Having suffered an unprecedented sales decline of 6-7 per cent in 2019-20, the industry will be up against challenges in both supply and demand sides due to the coronavirus pandemic, Panasonic India and South Asia President and CEO Manish Sharma told PTI.

"Demand in Q1 might be half of which it should be. In April, it may be only 25 to 30 per cent of the normal demand. While in the month of May, it would be half of the normal demand," he said.

It would take at least three more months for the appliances market to get back to normal, Sharma added.

"That's how Panasonic is preparing for itself. The market demand would shape up and we are looking at Diwali, for the situation to normalise," he said.

Commenting on the impact of the ongoing lockdown, he said in March there was a decline of 35 per cent in sales, which in turn had a huge impact on annual sales. The impact on annual demand was that it dropped by "6 to 7 per cent, which is quite unprecedented", Sharma added.

On the recovery path, Sharma said the industry is going to face challenges "not only on supply side but also on demand side" after the lockdown.

Before the lockdown, in February and March , the appliances and consumer electronics industry was already facing shortage of components, which are primarily imported from China, thus impacting production.

Sharma said the initial indicators from China started becoming visible from February onwards and that time it was more on the supply side.

"However, China slowly resumed operations by the first week of March and almost 50 to 60 per cent capacity was in operation and then we started to face lockdown," he said.

March is the month, when the sale of cooling products as airconditioners and refrigerators, which are necessary items, starts and in April-May it is on peak, Sharma added.

"There is a huge impact for Panasonic and the entire industry," Sharma said adding as per industry estimated most of companies have done only 30 to 40 per cent of their targets in March.

Seeking government support, he said taxes on consumer durables should be reduced to bring it into lower GST slabs to make it more affordable at a time, when people are expected to curtail discretionary spends after lockdown.

"When people would have lesser income, this essentially means that we have to make our products more affordable with a lower rate of GST for airconditioner and TV," he said.

Sharma also suggested that the industry should ensure more component manufacturing activities in the country to ensure smooth supply and demand.

Sharma, who is also heading the Electronic & White Goods Manufacturing Committee of FICCI said it is already discussing with various stakeholders on phased manufacturing plans on components such as PCB, compressors etc.

The government is also supporting the industry, which under the new scheme has announced up to 6 per cent subsidy on the total output.

"I expect that such schemes would encourage the manufacturing of backward integration of components of our industry, which is long due," he said.

Last month, the government approved production-linked incentives worth Rs 40,995 crore for electronics manufacturing companies.

Under the scheme, electronic manufacturing companies will get an incentive of 4-6 per cent on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies over a period of next 5 years.

When asked whether sale from e-commerce channels is going to increase in the appliances segment, he said for the initial week after lockdown it would rise as people would skip visit stores, but gradually offline would bounce back.

"When it comes to appliances, for a few weeks, there would be a surge in the sale (online) which will happen immediately once the lockdown is over. This may be for a couple of weeks but then the kind of emotion which we have and the touch and feel factor, which we are used to for our purchase decisions, specially in semi urban and rural areas, it will still be again offline," Sharma said.

Welcoming the Cabinet approval of schemes, Manish Sharma, Chairman, FICCI Electronics Manufacturing and President and CEO, Panasonic India and South Asia, said, “Electronics manufacturing industry, both domestic and foreign has been eagerly awaiting the initiatives to boost their production and also to integrate in the global value chain. These schemes I am sure would not only neutralize cost disadvantages in manufacturing to a great extent but also help India to be part of global value chain.”

“It is a very important move in the journey of ‘Make in India’ for electronics. The schemes announced by the government including the ‘Production linked incentive’, will not only boost the investor sentiment but is a big enabler for the development of the component ecosystem. Further to this, the SPECS (Scheme for Promotion of Electronic Components and Semiconductors), also attempts to bring stimulus to innovation with inclusion of incentive for Research & Development, a much-required step to enhance the scale of electronics manufacturing in India,” said Mr Sharma.

Aimed at attracting large investments in the country that includes manufacturing of electronic components, semiconductors and mobile segments

India’s cabinet has approved a $6.37 billion (Rs 637 crore) plan to boost electronics manufacturing. The new measures that come at a time the world is battling the coronavirus epidemic and halting global supply chains is aimed at attracting large investments in the country that includes manufacturing of electronic components, semiconductors and mobile segments.

The Scheme shall extend an incentive of 4% to 6% on incremental sales of goods manufactured in India and covered under target segments, to eligible companies, for a period of five subsequent years.

According to the Electronic Industries Association of India (ELCINA), the electronic components market in India has increased from Rs 68,342 crore in 2015-16 to Rs 1,31,832 crore in 2018-19.

India’s aspiration to become a major global hub for electronics manufacturing is twofold. Firstly, boost export led electronic manufacturing strategy at a global scale and make India manufacturing globally competitive. Further, the PLI scheme is proposed to offer a production-linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including assembly, testing, marking and packaging (ATMP) units, an official statement said.

The move is likely to give an aggressive push to ensure big companies such as Apple, Samsung, Huawei, Oppo and Vivo, besides contract manufacturers like Foxconn and Wistron bring their global supply chains to India and make the country an electronics hub.

Nitin Kunkolienker, President, MAIT said that the series of steps taken by the GoI, beginning with reducing Corporate Income Tax to 15% followed by the Production Linked Incentive scheme is a major step by India in this direction.

“India should now see large scale manufacturing happening in the country, translating into progressive increase in value addition from approximately 20% to 40%. This will boost the growth of ancillary units, engineering expertise, product engineering and software,” he said.

Kunkolienker however noted, the EMS & ODM’s are the companies that will lead the thrust and they make all kinds of electronic products. Thus, a framework that is product agnostic will see India emerge as a leader in multiple product categories, including those where much higher levels of value addition can be achieved. “The industry hopes this exercise will also get extended to other electronic products such as IT, Datacom, medical, industrial etc.,” he said.

According to him, “The implementation of this framework is a new path the country is walking and a learning process for all stake holders. It is extremely critical to keep it simple by ensuring annual signoff with no retrospective claims on industry on incentives disbursed.

Welcoming the Cabinet approval of schemes, Manish Sharma, Chairman, FICCI Electronics Manufacturing and President and CEO, Panasonic India and South Asia, said, “Electronics manufacturing industry, both domestic and foreign has been eagerly awaiting the initiatives to boost their production and also to integrate in the global value chain. These schemes would not only neutralize cost disadvantages in manufacturing to a great extent but also help India to be part of global value chain.”

“It is a very important move in the journey of ‘Make in India’ for electronics. The schemes announced by the government including the ‘Production linked incentive’, will not only boost the investor sentiment but is a big enabler for the development of the component ecosystem,” said Sharma.

To promote high-value local manufacturing, India plans to provide a financial incentive of 25% on capital expenditure for some electronic components, semiconductors and display fabrication units. Companies investing in new plants or expanding existing facilities will be eligible for this benefit.

“We are confident that the government’s assurance of providing a financial incentive of 25% on capital expenditure for the identified list of electronic goods and components, will not only enable India to become the electronics manufacturing hub of the world but also provide a fillip to its ‘Make in India’ program. All of these steps are going to provide a much needed boost to the sector and help homegrown companies to expand their business capabilities further,” Kishan Jain, Director at Goldmedal Electricals said.

As part of the plan, the Government of India also aims to create manufacturing clusters – with a minimum area of 200 acres – that have common facility centers, ready-built factory sheds and plug-and-play facilities.

With over a billion wireless connections and just about 480 million smartphones, India offers device-makers huge room for growth and its massive labor force provides companies a cost-effective alternative than neighboring China.

The Federation of Indian Chambers of Commerce & Industry (FICCI) said that the recently-approved Scheme for Promotion of Electronic Components and Semiconductors (SPECS) will fuel innovation and Research & Development (R&D) activities in the electronics sector.

"This will bring stimulus to innovation with inclusion of incentive for Research & Development, a much-required step to enhance the scale of electronics manufacturing in India," Manish Sharma, chairman, FICCI Electronics Manufacturing and president and CEO, Panasonic India and South Asia in a statement said.

On Sunday, the Cabinet approved the three key schemes to boost electronics and components manufacturing and exports in the country, with a total outlay of Rs 48,042.25 crore.

SPECS will provide a financial incentives for select electronic goods that comprise the downstream value chain of electronic products.

"These schemes would not only neutralize cost disadvantages in manufacturing to a great extent but also help India to be part of the global value chain," Sharma added.

The electronics manufacturing industry was awaiting the initiatives to boost their production and also to integrate into the global value chain.

The schemes announced by the government including the ‘production-linked incentive’, will not only boost the investor sentiment but is a big enabler for the development of the component ecosystem," Sharma added.

The confederation said that It was a very important move in the journey of ‘Make in India’ for electronics.

It will have financial implications of Rs 400 crore, Mandaviya said.

Rajiv Nath, forum coordinator of Association of Indian Manufacturers of Medical Devices, said, "We are more than hopeful that these schemes announced would help boost local manufacturing and will accelerate medical devices manufacturing as a "Make in India" enabler, make quality healthcare accessible and affordable for common masses, enable placing India among the top five medical devices manufacturing hubs worldwide and help end the 80-90 per cent import dependence forced upon us and an ever increasing import bill of over Rs 38,837 crore". Cabinet has approved production linked-incentives for electronics companies.

In a bid to boost large-scale electronics manufacturing in India, the Union Cabinet approved three schemes, including a production-linked incentive scheme, with a total outlay of nearly ₹48,000 crore.

Environment and information and broadcasting minister Prakash Javadekar said while mobile manufacturing has seen a significant jump in India in the last five years, it is time to take it to the next stage by encouraging manufacturing of electrical components, semiconductors, and setting up production clusters.

As a result of the scheme, the domestic value addition for mobile phones is expected to rise to 35-40 per cent by 2025 from the current level of 20-25 per cent, as per the statement and the total employment (direct and indirect) potential of the scheme is around 8 lakh jobs. He added the schemes have potential to generate an additional employment of 33,750 jobs over five years and reduce import of target segments of medical devices.

It also approved revised version for electronics manufacturing clusters with a total incentive outlay of Rs 3,762.25 crore spread over a period of 8 years with an objective to create 10 lakh direct and indirect jobs under the scheme.

"FICCI welcomes the Cabinet Approval of new scheme for electronics component manufacturing & semiconductors & also Production Linked Incentives".

Under the sub-scheme for promotion of medical device parks, common infrastructure facilities would be created at four parks, which is expected to reduce manufacturing costs.

This is likely to benefit 5-6 major global players and few domestic champions, in the field of mobile manufacturing and Specified Electronics Components and bring in large scale electronics manufacturing in India. This is investment in the downstream value chain.

Electronics Manufacturing Clusters (EMC) 2.0 was also approved to create infrastructure along with industry specific facilities like common facility centers, ready built factory sheds, among others. It will give grants-in-aid to each state, up to Rs 100 crore for each "Medical Device Park" and Rs 1,000 crore for each "Bulk Drug Park" over the next five years.

India's share in global electronics manufacturing has grown nearly 2.5 times in six years, i.e. from around 1.3 percent in 2012 to 3 percent in 2018. "Quick disbursement of money on the basis of one or at-most two parameters and ensure annual signoff with no retrospective claims on industry on incentives disbursed", MAIT President Nitin Kunkolienker said.

Welcoming the Cabinet approval of schemes, Mr Manish Sharma, Chairman, FICCI Electronics Manufacturing and President and CEO, Panasonic India and South Asia, said, “Electronics manufacturing industry, both domestic and foreign has been eagerly awaiting the initiatives to boost their production and also to integrate in the global value chain. These schemes I am sure would not only neutralize cost disadvantages in manufacturing to a great extent but also help India to be part of global value chain.”

“It is a very important move in the journey of ‘Make in India’ for electronics. The schemes announced by the government including the ‘Production linked incentive’, will not only boost the investor sentiment but is a big enabler for the development of the component ecosystem. Further to this, the SPECS (Scheme for Promotion of Electronic Components and Semiconductors), also attempts to bring stimulus to innovation with inclusion of incentive for Research & Development, a much-required step to enhance the scale of electronics manufacturing in India,” said Mr Sharma.

With the aim to boost domestic manufacturing along with attracting investment in electronic component manufacturing, the Union Cabinet today has approved three schemes. Chaired by Prime Minister Narendra Modi, the cabinet has approved the Production Incentive Scheme (PLI) for Large Scale Electronics Manufacturing, financial assistance to the Modified Electronics Manufacturing Clusters (EMC2.0), and financial incentive of 25 per cent of capital expenditure for the manufacturing of goods.

The Production Incentive Scheme (PLI) for Large Scale Electronics Manufacturing proposes production linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components including Assembly, Testing, Marking and Packaging (ATMP) units. The total cost of the proposed scheme is approximately Rs 40,995 crore, which includes an incentive outlay of approximately Rs 40,951 crore and administrative expenses to the tune of Rs 44 crore.

As electronic components are the basic building blocks for electronics manufacturing, the industry has been heavily relying on China. According to the Electronic Industries Association of India (ELCINA), the electronic components market in India has increased from Rs 68,342 crore in 2015-16 to Rs 1,31,832 crore in 2018-19. Domestic production of electronic components is valued at approximately Rs 63, 380 crore, of which around Rs 48,803 crore is domestically consumed.

Kamal Nandi, President-CEAMA & Business Head & EVP Godrej Appliances says, "We welcome the array of schemes introduced by the Union Cabinet. In this difficult time where the industry is going through a tough phase, the steps taken by the government will help to boost domestic manufacturing and attract large investments in the electronics value chain. We are hopeful that the proposed schemes will aid in creating more job opportunities. This will also put an upward thrust on the economy by bringing in large scale electronics manufacturing to India. CEAMA is committed to promoting indigenous manufacturing of appliances and consumer electronics in the country. The announcement of the Production Incentive Scheme (PLI) for Large Scale Electronics Manufacturing, will assist in the necessary boost to the 'Make in India' initiative and support India into becoming an electronics manufacturing hub."

"FICCI welcomes the Cabinet Approval of new scheme for electronics component manufacturing & semiconductors & also Production Linked Incentives. This will help in deepening the supply chain in the country & provide more opportunities for employment", tweeted FICCI by tagging Manish Sharma, Executive Officer, Panasonic Corp. President & CEO, Panasonic India & SA, and Ministry of Electronics and Information Technology.

The Scheme shall extend an incentive of 4 per cent to 6 per cent on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five years subsequent to the base year as defined.

This is likely to benefit 5-6 major global players and few domestic champions, in the field of mobile manufacturing and Specified Electronics Components and bring in large scale electronics manufacturing in India.

A report titled ‘Impact of Covid-19 on Indian Economy’ released by FICCI today notes that at least 10 industries in the country are affected due to supply chain disruption caused by Covid-19 pandemic including automobile, electronics, medical devices, pharmaceuticals, textile and MSMEs.

The report also said that Covid-19 has had an impact on the transport and logistics sector as well. “The transport sector revenues have been affected and are likely to be further impacted with the slowdown in economic activities due to the urban lockdown across several states, combined with the supply disruptions caused globally,” says the report.

China accounts for 27 percent of India's automotive part imports and major global auto part makers such as Robert Bosch GmbH, Valeo AS and ZF Friedrichshafen AG have factories located in the Hubei province. There has reportedly been a delay in the production and delivery of vehicles like Bharat Stage Four (BS-IV) compliant models.

The situation has become more precarious after the decision of the Chinese government to limit all shipments by sea until further notice. Since air shipments are not suitable for Auto Components and forging industries, the Indian OEMs are finding it difficult to plan production beyond the available inventory. According to a report released by Fitch Solutions recently, vehicle production in India is likely to contract by 8.3 percent in 2020 following an estimated 13.2 percent decline in 2019. Covid-19 will also make the transition to Bharat Stage Six (BS-VI) emission norms difficult which is scheduled from 1st of April 2020.

India imports 45 percent completely built units of consumer durables from China. In addition to finished products, India also imports nearly 70 percent of the components for television, and other consumer durable products such as air conditioners, refrigerators, and washing machines. Due to supply disruption, sales of these items are likely to be hampered. Also, Chinese suppliers have reportedly increased the prices of some components by more than 2 percent, and prices of TV panels by more than 15 percent. Hence, it is anticipated that the prices of these consumer durable items will see a price increase in the range of 3-5 percent.

India imports a variety of consumables, disposables and capital equipment including orthopaedic implants, gloves, syringes, bandages, computed tomography and magnetic resonance imaging devices from China. Due to the current crisis in China, the medical device manufacturers across India are finding it difficult to source important raw materials and electronic components from Chinese factories.

Most of the components for mobile manufacturing is sourced from China. With the continued shutdown of factories in China, mobile manufacturing companies are also facing a fate similar to that of pharma and auto companies. Short supply of components led to a rise in prices of mobile parts, which in turn resulted in an increase in the prices of mobiles. Companies have also been forced to postpone the launch of new variants of mobile. India Cellular & Electronics Association estimates suggest that mobile phone manufacturers could see a production impact worth Rs. 6,000 crore during March and April due to the disruption in the supply chain.

MSMEs are likely to be severely impacted if the lockdown continues for a longer duration in wake of the Covid-19 pandemic. A large number of MSMEs could incur business losses and also face severe cash flow disruption, which in all likelihood will have an adverse effect on the livelihood of several people working in this sector. Given the severity of the crisis, it is important to ensure health safety of MSME workforce, especially those involved at shop floors. Additionally, from an economic perspective, it is extremely important to ensure the flow of money into the working capital of such enterprises otherwise there will be a risk to the survival of these enterprises.

India imports about 85 percent of its total requirement of active pharmaceutical ingredients (APIs) from China, according to the Trade Promotion Council of India. In 2018-19, around 67 percent of total imports of bulk drugs and drug intermediates were sourced from China. As per the records of Pharmexcil, out of the total 58 molecules that are imported from China, 12 are imported from the Hubei province which is the epicentre of Covid-19. With the situation still remaining critical in China particularly in Wuhan, supply disruptions from China are likely to continue for several weeks more.