What does the Semiconductor Industry portend for India?
By Priya Pradeep   |   Friday, 22 February 2008, 01:01 IST
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Bangalore: 'Incredible India' is not just the catch phrase of the Indian tourism industry. It is India now. With its economic cannons going ballistic there is a spurt of growth across all industries in the country with Information Technology (IT) being the flagship sector. The Indian semiconductor industry within IT has a cardinal role to play in India's success story. India's rapidly expanding Gross Domestic Product (GDP) is expected to boost electronics demand in the public and private sectors. India has the ingredients for a winning market - increased domestic demand, favorable policies for investment and the development of a support infrastructure. Going forward, the semiconductor sector hopes to attract sizable foreign investment and position India for product design and manufacturing following the country's success in design services. At the second day of the India Semiconductor Association's Vision Summit 2008 held on February 19 at Bangalore, the Incredible India session had eminent speakers like Gurcharan Das Author, Columnist & Management Consultant; Ravi Pandit, Chairman & Group CEO, KPIT Cummins Infosystems; Dr. Debesh Das, Minister-In-Charge, Department of Information Technology Government of West Bengal; and Ramesh Ramanathan, Founder, Janaagraha and National Technical Advisor for Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The speakers gave a ringside view of the growing India. According to them India has grown from 1980 to 2002 consistently at 6 percent, which is double the growth that the industrial revolution witnessed. Since 2002 the growth rate has been higher. In 1980 the per capita income in India was $1000 and now it has tripled to $3500. The private sector has fueled the growth rate and now the emphasis for further growth is public-private partnership (PPP). In 1980 the middle class occupied 8 percent of India?s population, now it is 28 percent and by 2020 it would touch 50 percent. Hence with big money to be made in agriculture, manufacturing, energy, construction, transport, education, entertainment, communication and electronics amongst others the semiconductor industry is on the cusp of a great opportunity in India to meet the demand for silicon in all these sectors and more. The demand is multifold. Statistics reveal that eight million mobiles are sold in India per month, which is greater than the population of some countries. This demand is set to grow with companies penetrating the rural populace too. The growth potential can be gauged from the fact that urban India occupies just 2 percent of India's land mass, but contributes to 60 percent of India's GDP. Hence the rural region can contribute upwards to the economy if growth can be generated here with supporting government policies. Thus there will be rapid urbanization of rural geography. Right now there is great opportunity for the industry as the investment in urbanizing India now stands at $500 billion. And hence the Indian semiconductor industry is poised on the path of great positive growth.

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