India to rev up manufacturing with IT incubators

The Indian government has set out to establish several IT incubators in the country to attract investment and boost its electronics manufacturing.

India's Department of Information Technology (DIT), the federal agency that oversees hardware and software policies, is in talks with regional governments as well as private and public sector organizations and is also trying to tap into foreign investments for setting up the incubators.

While India is developing a hardware manufacturing policy, the government is concerned that domestic electronics production—which is forecast to rise to as much as $155 billion in 2015, according to market researcher Frost & Sullivan—will be built on the back of huge imports of semiconductors and manufacturing equipment.

The government also is in talks with potential investors, and the DIT and the Department of Science and Technology are considering subsidies for investments in nanoelectronics and solar technologies, according to DIT's Madhavan Nambiar.

Competitive tax rates
Meanwhile, the agency is trying to reduce tax rates on electronics goods from about 25 percent to levels in line with other Asian countries.

According to Nambiar, national semiconductor and electronics policy guidelines have attracted much interest from chipmakers and related companies. However, he said potential Indian and overseas investors remain concerned about infrastructure issues such as availability of water, power and transportation.

He added that the government is also concerned about the lack of skilled electronics production workers. It is seeking to increase the current total of about 1 million workers to 8 million over the next five years.

"The government will also be tackling the infrastructure issues head-on with the imminent hardware manufacturing policy, while [upgrading] training institutes so that adequate skilled personnel are available as manufacturing takes off," Nambiar added. "Once the entire package comes into play, hardware companies will find it much easier to base their production units in [India]. We are also encouraged that there has been a lot of interest shown by overseas companies to set up production facilities."

- K.C. Krishnadas
EE Times