There was a time when West Bengal was one of the leading commercial hubs in India and was extremely industrialised. But, industries started moving away. The electronics industry suffered major setbacks in the region. To counter this scenario, the state government formed the West Bengal Electronics Industry Development Corporation Limited (WEBEL) on February 4, 1974, to boost the electronics industry in the state. According to sources at WEBEL, over the past few years, there has been a gradual acknowledgment of the strategic advantages of Bengal, a maturing socio-political attitude, and an appreciation of the proactive efforts by the government and various other important stakeholders to nourish Bengal’s value proposition and consolidate its position as a destination of corporate choice.
Electronics Bazaar’s Nijhum Rudra spoke to Prodip Mukhopadhyay, MD, WEBEL, about the state’s major challenges in the concerned sector, the benefits of the recently approved NPE policy, and how WEBEL is taking major initiatives to strengthen of the electronics industry in West Bengal.
EB: Can you highlight the biggest challenges the West Bengal (WB) electronics manufacturing industry is facing currently. What do you think are the major impediments in this sector, across India?
The inflow of FDI is a major element for improving industrialisation in a country or a state. In the case of West Bengal, FDI has been quite insufficient for the past 20 to 30 years. Another major challenge is that most of the giant original equipment manufacturers (OEMs) have already established their hubs/units in other states. Without OEM units, it is difficult to build up a strong electronics manufacturing cluster. Then, there is inadequate ancillary support for the electronics industry in the state. Apart from West Bengal, inadequate FDI inflow is also a major concern across India. Due to the Free Trade Agreements (FTA), the cost of finished products imported from other countries is lower than the manufacturing cost of the same/similar product in India. Lastly, import duties and import-export processes need to be governed by a proper policy.
EB: WEBEL has been one of the major electronics associations in the state since many years. Can you highlight the steps taken by your association to improve the electronics industry?
The state’s Information Technology and Electronics Policy 2018 envisages West Bengal as one of the leading states in India in the IT, ITeS, ICT and ESDM sectors. The launch of the Bengal Silicon Valley IT hub (200 acres) project in August 2018 has started attracting investments in IT and electronics. This will help create a state-of-art ecosystem for new technologies and innovation. Currently, 17 IT parks in Tier-II and Tier-III cities have been made operational. These provide excellent infrastructure in terms of office space, high-speed Internet and other facilities. In each IT park, an area has been earmarked for the manufacture, assembly and testing of electronics hardware and systems.
- Also, a statewide as well as national competition, called Bengalathon, was organised by WBEIDC in the field of IT and electronics.
- In West Bengal, the competition was launched in November 2017, and had over 800 registered participants. There was participation from all leading technical institutes and emerging startups in the state.
- Five problem statements had to be cracked, and the winning solution (Toto on Call) got implemented in the Green City zone of Kolkata.
- The nationwide rollout happened in July 2018 with three rounds—ideation, prototype-making and the solution.
- More than 1500 teams registered for the competition from seven states. In this competition, 11 problem statements were cracked, 127 concept notes were submitted, and 19 teams competed in the grand finale.
EB: Do elaborate on the vision and mission of WEBEL.
As a state level nodal agency of the Department of IT & Electronics, West Bengal, we are here to enable the state government to leverage technology to implement the ICT policy and realise its goals effectively. WEBEL also aims to improve citizen services in a more effective, efficient and transparent manner. Our vision is to assist and enable the growth of the ICT and electronics industries in WB and to promote IT.
And as a corporation, our internal policy aims to achieve sustainable, profitable growth and to become the partner of choice for every department in the state when implementing their technology adoption plans for better citizen services. Basically, we deploy emerging technologies in state government projects.
Our mission is to create the physical IT infrastructure required for citizens of the state, to make it available to them in the most cost-effective manner, and make West Bengal a preferred destination for investment in the IT, ITeS, ESDM and electronics manufacturing sectors. We ensure capacity creation in ICT in all departments of the state through relevant training and by building skills. WEBEL also acts as an enabler for training and skill building for the youth of the state, so that they have the skills in the latest trends in IT and electronics, and are directly employable in the IT, ITeS and electronics industries.
Last but not the least, WEBEL encourages and facilitates the creation of an ecosystem for IT and the electronics industry across the state by partnering with premier academic institutions and organisations of global repute.
EB: Recently, the Union Cabinet approved the National Policy on Electronics 2019, which highlighted some important initiatives and objectives in the electronics and manufacturing sector. Do you think anything is missing in this policy? Could this policy become a game changer in the electronics industry?
With this policy, we have received sufficient financial incentives through MSIPS across the ESDM value chain. It has also highlighted the preference for domestically manufactured electronics products in government procurement under the aegis of the Public Procurement Order 2017. The Electronics Manufacturing Cluster (EMC) scheme in the policy encourages greenfield and brownfield projects by providing grants-in-aid. Even the Electronics Development Fund (EDF) will invest in venture funds to provide financial assistance to startups in the area of electronics, nano-electronics and IT. Another important initiative is the Phased Manufacturing Programme, which will promote domestic production of mobile phones by providing tax relief and other incentives on components and accessories used for the devices. Over the last two years, this programme has resulted in the setting up of 40 new mobile handset manufacturing units, and 30 mobile components and accessory manufacturing units. It has created direct employment for over 100,000 people and indirect employment for 200,000 people.
The policy will encourage the electronics industry in a number of ways.
- It will boost industry-led R&D and innovation in all sub-sectors of electronics.
- The policy has proposed a Sovereign Patent Fund (SPF) — a state-led investment fund that will acquire intellectual property (IP) assets in the ESDM sector.
- It will promote the development of skills, by including the Atal Tinkering Lab in schools to initiate R&D programmes in electronics design.
- It will also encourage the fabless chip design industry, by providing support in the form of electronic design automation (EDA).
- It will promote the medical electronic devices industry, the automotive electronics industry and power electronics for mobility, as well as the EMS industry.
EB: What kind of assistance do you require from the state ministry to boost the sector?
West Bengal, India’s sixth largest state in terms of the economy, had a gross state domestic product (GSDP) of US$ 158.40 billion in 2017-18. The state’s GSDP grew at a CAGR of 11.88 per cent from 2011-12 to 2017-182. The government of West Bengal’s expenditure in the IT&E sector has grown 453 per cent over the last six years (in 2011 it was ₹ 327 million and in 2017 it was ₹ 1.61 billion). The state has delivered 132 citizen-centric services online through its e-District portal as part of simplifying services activities.
The WB government came up with a new IT policy in 2018 with a vision to become one of the leading states in India in the IT, ITeS, ICT and ESDM sectors. This comprises three pillars – the government as a platform, the government as a knowledge catalyst, and digital technology for social benefits. A newly revamped State Data Center is already in operation, on which all e-governance applications are hosted. Also, significant investments have been made in creating physical IT infrastructure. Expenditure on IT parks grew significantly till 2016-17 with an absolute outlay of ₹ 2.94 billion. Under EMC, the expenditure was ₹ 62.37 million for 2013-14 and 2016-17 fiscal years respectively.
West Bengal has taken several initiatives to create an IT ecosystem like the development of the Industry 4.0 standard IT infrastructure, ease of availing services through an online single-window platform, skilling and reskilling of available human capital as per industry-specific requirements, delivery of citizen-centric services at the doorstep, etc.
The state aims to become one of the top three states in India by turnover, and the Department of IT&E, government of West Bengal, has planned to engage a PR agency to leverage conventional channels, as well as initiate contact programmes and new age digital channels to highlight West Bengal as a preferential investment destination.
EB: Do you think huge investments are required in West Bengal and in India to strengthen the EMCs?
To create an ecosystem in the ESDM sector, investments in IT infrastructure are required by the government, corporates and foreign OEMs. The government of West Bengal has already set up two new greenfield electronic parks at Naihati and Falta by investing significant amounts. The demand for electronic hardware in India is expected to rise to about US$ 400 billion by 2025. This offers a big opportunity to grow in this sector. More phased investments in infrastructure are required in this sector, in the years ahead.
To encourage exports, the government of India is now offering a number of incentives such as import Replenishment (REP) licences, the Import-Export Pass Book scheme, the Duty Exemption scheme, 100 per cent export-oriented units, exemption of sales tax and Export Promotion Capital Goods (EPCG) scheme.
EB: What are the main reasons we lag behind China, Japan and other Asian countries in terms of electronics manufacturing?
The advantage China, Japan and other Asian countries have is FDI. According to the United Nations Conference on Trade & Development (UNCTAD) reports in 2016, FDI inflow in China was US$ 134 billion. China’s merchandise trade patterns helped it to increase exports from US$ 14 billion in 1979 to US$ 2.3 trillion in 2017. Basically, the ecosystem is better in these countries. In 2017, China signed a FTA with 22 partners. Unlike India, it has created many flexible investment zones, export processing zones, free trade zones, high tech zones and provided large infrastructure for business, as well as proper e-waste management. Most importantly, there is ample availability of skilled resources—compulsory education in China has helped the country reach the second position in the world in terms of number of workers with a tertiary education, which is 70 million.
