With over two decades of experience in the Indian semiconductor and electronics industry, Vinay Shenoy, chairman, IESA, and vice president and managing director, Infineon Technologies India Pvt Ltd, has been a part of the transformations in this sector. Having been associated with the India Electronics & Semiconductor Association (IESA) as the vice chairman for 2014-15, he has now taken over the role of chairman for 2015-16. In an interaction with Shweta Sengar of Electronics Bazaar, Shenoy shares valuable insights on the growing electronics base in India, and his vision for IESA as he takes up his new role
Time to operationalise government policies
EB: You have been in this industry for more than two decades now. What kind of transformation have you witnessed during this period?
The R&D ecosystem of local manufacturing industries and MNCs has been developing over the last 30 years and is now at a mature stage. While the IT industry has developed very well, the focus has now moved to manufacturing and innovation. The government policies over the past three years have focused on all the three aspects and not just one. This is the transformation that I have witnessed over the past 26 years in this industry.
EB: What are your immediate goals as the new chairman of the IESA?
IESA is working towards realising the country’s goals in line with Prime Minister Narendra Modi’s ‘Make in India’ initiative. We, as an organisation, have a very critical role to play. We advise the government, which is the policy maker, on the most optimal way to deploy and implement a policy. The government has formulated policies that are quite attractive. We are now at a stage to operationalise these policies and present them before various industry members who can, in turn, benefit from them.
EB: What are your long-term goals with respect to IESA?
Historically, IESA has been a strong force in the semiconductor, ESDM and electronics segment in the country. The focus has been on demand creation so far, but going forward, we will be looking at the electronics industry at a macro level. We will also work on making India an attractive destination for MNCs to manufacture in.
We are already promoting ‘Made in India’ products and our efforts cover innovation as well as manufacturing. Specifically, without losing our focus on semiconductors, we will start looking at the development of the entire electronics segment.
EB: What steps are you taking to build a sustainable ESDM ecosystem?
For a sustainable ESDM ecosystem, our approach has to be multi-dimensional. Manufacturing is essential for the whole ESDM industry. We do not see India as a low-cost manufacturing hub like other nations. We have a strong pedigree in manufacturing, engineering and innovation. Going forward, IESA’s objective is to lay emphasis on innovation and manufacturing in India. All our initiatives will be directed towards attracting multinational companies into the country and also using their existing R&D base in India to leverage manufacturing. Promotion of start-ups is another area of focus.
We plan to work closely with the government to aid the investor community and ensure adequate funding is made available for technology start-ups. In recent times, telecom and technology based start-ups have received adequate funding. We are now beginning to tie up with investors to ensure that there is a decent flow of funds from the government. DeitY has made available some funds like the Electronics Development Fund (EDF) for the benefit of the electronics community. Moreover, incubation centres, like the one in Bengaluru, are being set up. This shows that the government is working hard to build a fortified manufacturing ecosystem in the country.
‘Make in India’ and beyond
EB: A myriad of policies and schemes related to the electronics sector were introduced last year and are being implemented now. So, what is in store for 2015?
In my opinion, not only 2015 but 2016, too, will be a period of implementation and marketing. The industry will be driven by skills development, the setting up of manufacturing infrastructure and electronics clusters, preferential market access, good incentives, etc. Taking a deeper look at the myriad of policies, it becomes clear that they focus on the entire electronics sector. The current year will prove to be one that will require industry’s participation to build a sustainable and healthy ecosystem for the Indian electronics sector. Promoting these policies within the country as well as abroad will be a top priority. Prime Minister Modi was at Hannover Messe, Germany, and then Canada, as well at other countries, promoting the ‘Make in India’ concept. In the coming days, we will see a lot of promotional activities like these.
EB: What’s your take on the ‘Make in India’ and ‘Digital India’ campaigns? How is IESA moving on these fronts?
We are an integral part of ‘Make in India’, and it is not just about manufacturing but also innovation and engineering. We are aiding the government to build strong R&D facilities in the country along with third party R&D service capabilities. We are exploring what role our members can play individually, in this regard. We are working towards building ‘100 smartcities’ in the country, moving ahead with ‘smarthomes’, ‘smart power’, ‘smart transportation’ and ‘smarthealthcare’. All these projects require sensors and controlling mechanisms, all of which is essential electronics. A ‘smartcity’ does not need only IT—the basic infrastructure is highly dependent on electronics.
EB: Over the years, IESA has been instrumental in aiding the government in the formation of policies and schemes. How do you plan to take this further?
The government has very effectively announced and implemented policies in recent times. IESA has added a lot of value to the shaping of these policies. The association is very satisfied with the policies that have been launched. We are partnering with the government inside the country as well as abroad to transform these policies at the functional level, and playing a significant role in boosting the start-up culture and the flow of investments in the country. The association also closely works with the states in policy formation and implementation. We plan how an electronics manufacturing cluster has to be set up effectively, which encompasses various segments like smartcards, telecommunications, power, etc. To be precise, at present, it is all about operationalisation.
EB: How long will it take for India to fully develop into a self-reliant country in electronics?
If we have to emulate Taiwan, Japan, China and Korea in the field of electronics, it will take about 10 years for India to fully develop into a self-reliant country in electronics. The full potential of the country has to be realised to reach the goal of a self-sustaining economy, for which the policies and incentives are required.
EB: On the international front, IESA also tied up with the Taiwan Electrical and Electronic Manufacturers Association (TEEMA) recently. What is the aim of the tie up?
This is quite a new initiative and a very important move by IESA to promote ‘Make in India’ campaign in the global markets. The Taiwanese companies are rather efficient in establishing manufacturing firms based on electronics. There are a large number of small and medium enterprises (SMEs) based in Taiwan, which are capable of establishing manufacturing units in India. This is where the association with TEEMA comes very handy — for the flow of investments into the country. The partnership of the two associations primarily provides an easy conduit for investments, technology, etc, into India.
Need for a stable business
EB: After all the policies have been formed and are in the process of implementation, what are the challenges that will take time to be addressed?
Now that the policies and initiatives of the central government have been announced, the actual realisation of these policies takes place in the states. The states also have a very important role to play to realise the potential of this country, in electronics. While there are some states which are very enthusiastic, other states should take their cue from the leaders and actively participate to achieve this goal. Every state should actively participate in the ESDM sector so that wider choices are available for companies who plan to invest in India. It all depends on how quickly the states adopt these policies to attract investments. There are some traditional challenges like state taxation norms, which need to be resolved on an urgent basis. Logistics plays a very important role in electronics manufacturing. So in case a company plans to manufacture in a Tier II city, quick approvals and clearances, and transportation are a major challenge. Setting up of proper manufacturing infrastructure in Tier II cities, similar to what is available in Tier I cities, is of utmost importance.
EB: What are the key challenges of the industry currently? What role is IESA playing to overcome them?
The challenges are not just limited to manufacturing but R&D too. The companies based in India in this segment are looking to ensure stability in business. Also, infrastructure and bureaucratic hurdles that delay the whole process, apart from taxation matters, need to be resolved as soon as possible. For technology based start-ups, the struggle to find funding continues. The MSMEs in India face the same problem. So the challenges differ from segment to segment, and they need to be dealt with using different approaches. I am sure the government is aware of these challenges and a drive to overcome them can be expected soon.
IESA always performs its role efficiently. We make sure that adequate capital is made available to firms that need it, along with the technological backing. IESA is playing an important role in forming electronics clusters. Moreover, we work closely with the Centre as well as the state governments in the formation and implementation of policies.
