Aiming to make India a manufacturing hub for electronics and semiconductors, the India Electronics and Semiconductor Association (IESA), a body representing the country’s Electronic System Design and Manufacturing (ESDM) industry, is opening its first overseas office in Taipei, Taiwan, today.
The office will be inaugurated by Ashwini K. Aggarwal, Chairman, IESA; Mignonne Chan, who will head the Taiwanese office and delegates from Andhra Pradesh, Chhattisgarh and Kerala – the first three States to promote investment opportunities among Taiwanese electronic manufacturers.
A memorandum of understanding (MoU) with Taiwan Electrical and Electronic Manufacturers’ Association (Teema) to promote co-operation and investment between Indian and Taiwanese companies in the ESDM industry was signed in 2015. Opening an office in Taipei comes as the next step of this co-operation.
Last week, 14 Taiwanese companies visited Bengaluru to meet local manufacturers and explore investment opportunities.
“The enthusiasm of Taiwanese companies is amazing. Earlier, they were looking at the countries that are their neighbours, but now they are looking at South Asia broadly and India is a focus country,” MN Vidyashankar, President, IESA, said, in an interview to BusinessLine. “With this initiative we are targeting $350 million investment in the next three years.”
According to Vidyashankar, the range of products that Taiwanese players are interested to manufacture in India, either on their own or in partnership with local manufacturers, is wide and targets mainly consumer, industrial, automotive electronics and mobile devices, among other verticals.
“Made in India” products and components will be supplied both to the domestic market and exported to third countries.
IESA is planning to set up its second overseas office in Japan, another leading ESDM market, Vidyashankar added.
India’s ESDM industry stood at $82 billion in 2015, growing at a compound annual growth rate (CAGR) of 8 per cent since 2013, according to the IESA-EY report.
By the end of 2017, the sector will cross $100 billion, the report adds, and is expected to grow further at a CAGR of 16-23 per cent to reach $171-228 billion by 2020.
India is heavily dependent for components import on countries such as China, Taiwan, South Korea and Japan, although electronic manufacturing service companies in India have reached considerable maturity for final assembly, testing, packaging and distribution services, the report notes.
While value addition remains limited owing to the dominance of SKD (semi-knocked down) type of assembly, Indian companies are gaining scale and maturity and CKD (completely knocked down) manufacturing activities gain traction, and FDI from large foreign manufacturers is seen as a necessary boost for development of the entire value chain.