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![TMCNet: 'Preferential market access policy will transform electronics sector' [Strategy] [Times of India]](http://images.tmcnet.com/siteart/invisible.gif)
'Preferential market access policy will transform electronics sector' [Strategy] [Times of India]
(Times of India Via Acquire Media NewsEdge) BANGALORE: Bangalore is one of the world's leading chip design hubs, and the industry has been represented by the India Semiconductor Association (ISA) since 2005. But ISA has just transformed into the India Electronics and Semiconductor Association (IESA). P V G Menon, president of IESA, talks about this transformation.
ISA has become IESA, its charter has changed. Can you explain what's driving this
With India's consumption of electronic products growing rapidly, the electronic system design and manufacturing (ESDM) market is expected to be $400 billion by 2020. The current market is dominated by imports, and the government is now doing a lot to encourage domestic manufacturing. IESA will help in this effort. We are changing from playing just an advisory role to now also playing an implementation role. We have signed MoUs with the Karnataka and Orissa state governments to establish clusters of electronics manufacturing companies. We are working actively on skill development.
Is the nature of your membership changing
About 18 months ago, 55% of our members were foreign companies, and 45% were Indian companies. Today, 55% of our members are Indian companies.
Earlier we were dominated by semiconductor and chip design companies. Now, 30% of the members are systems companies, those who do complete products. As we broaden this base, people will see more value in IESA.
The government has talked about contributing Rs 10,000 crore towards establishing funds for the electronics sector. Have you seen any progress
The government expects some focused funds to be established soon, in partnership with private entities. They said they have received some proposals. China, Israel, Taiwan all have quite a few of such funds.
Have you seen the preferential market access policy begin to have an impact
At the Vision Summit we saw a lot of excitement around it. It will definitely have a profound impact.
It will encourage local companies, and also push MNCs to manufacture here.
Today, a lot of MNCs use Indian resources to create products that are patented in the US, and those revenues are not recognized in India.
But the preferential market access policy, with its mandates on value addition in India, will persuade multinational companies to start recognizing those revenues here, and to file patents here. There will be a greater aspiration to build products here.
(c) 2013 Bennett, Coleman & Company Limited
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