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Where's India's R&D?Imports 70 percent electronics
By SiliconIndia | Wednesday, 02 September 2009, 03:48 Hrs |
41 Comments
More than 70 percent of electronics appliances demand is met through imports, the study revealed. The joint study done by the Associated Chambers of Commerce and Industry of India (Assocham) and Ernst and Young points out that the Indian industry spends only $10 million on research and development.
"Meagre spending on research and development by electronics industry has increased India's dependence on electronics imports inspite of the 150 percent tax exemption under Income Tax Act Section 35 (2AB)," said Sajjan Jindal, President, Assocham.
Imported electronic goods counted to $19.77 billion in recent times, as export earnings were $3.17 billion.
"More than 35 percent of electronics appliances imports in India are sourced from China," said the study.
The study, which is based on inputs from 89 companies, also stated that the Indian electronics and appliances market has less than two percent share in the global market, while share in production is less than one percent.
Foreign Direct Investments (FDI) in the electronics industry stood at $0.75 billion during the nine year period from April 2000 to March 2009.
The electronic and appliances industry is poised to grow at a compound annual growth rate (CAGR) of 11 percent, as the industry which is estimated at $27 billion in 2008-2009, is expected to touch $40 billion by 2012.
The industry had a growth of 7.1 percent previous year in terms of rupees. The CAGR from 2004-2008 has been 20.3 percent, which also had effects of currency devaluation.
According to the study, the key factors which will drive domestic electronics and appliances market include growth in per capita income, shift in cultural patterns, life-styles and access to credit. About 10 million households are estimated to have income levels above $10,000 per annum. With a growth of 20 percent in per capita income, this segment provides opportunities for luxury products sales. More than 95 percent of households are estimated to be below the income level of $10,000 in 2009-10.
Rising income and changing lifestyle have shortened the replacement cycle, as a television set which is meant for change once in every nine years (It has come down to 4-5 years). Other domestic appliances replacement cycle has also fallen down to 7-8 years from 12 years. With the allocation of $8.15 billion in the National Rural Employment Guarantee Act (NREGA), which is going to benefit 44.7 million households, a change in the demand for consumer goods in the electronics and appliances industry is expected.
The joint study has also recommended a 25 year master plan with a long term vision for electronics and appliances industry, deriving strategic options available to attract manufacturing facilities in India.
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Reader's comments(41)
1:
Pune (India)
One wonders how India is going to compete with the so called 'Asian Tiger', increasingly depending on it in such critical areas. The Indian industry in general is seen as interested in making quick buck importing goods or technology even when such imports are of semi knocked down(SKD) form or completely knocked down(CKD) type. The Government of India must provide more incentives, in tax and capital, to industries consistently investing in R&D.
http://jdbapat.blogspot.com
One wonders how India is going to compete with the so called 'Asian Tiger', increasingly depending on it in such critical areas. The Indian industry in general is seen as interested in making quick buck importing goods or technology even when such imports are of semi knocked down(SKD) form or completely knocked down(CKD) type. The Government of India must provide more incentives, in tax and capital, to industries consistently investing in R&D.
http://jdbapat.blogspot.com
Posted by:Dr J D Bapat
- 20 Sep, 2009
2:
India is not interested to R&D.The government only care for cheap and quick profit.What a Telemarketer, a costumer service agent can do to help expend mankind knowledge?Yet this is what the Indian government use for a decade to propel its economy.But the Indian government is tantamount to the Indian individuals.They are cheap and cheerful,looking for quick profit without spending no penny and are proud of it.Try to go to a electronic store where an Indian seller is waiting for you.He will convince you to buy the worst sh..t* in order to sell something.It append to me so many time.They think they're smart but are typecasting themselves to second goers.
Posted by:shapour
- 07 Sep, 2009
3:
It is sheer greed of Indian companies that they don't spent a penny for R&D. So their products fail in International/National market whenever they are open to competition with foriegn products. What they do most is bribe some goverment labs to get some research results when they are on the verge of throwing out of the market. Our business doesn't know the value of research and the opportunities it opens up. They are just out to cheat the public by selling worn-out stuff and make money. Take the case of US universities. Most of the famous one are immensely funded by business houses just for their love towards knowledge. Here except Tatas to some extent, nobody has that kind of an outlook.
Posted by:Jaya
- 04 Sep, 2009
4:
Hi everybudy! Can anyone suggest me the small electronics products that can be manufactured easily in india, but r still imported! I have recently passed b.tech, nd i have certain job offer, but i wana to be an entrprnure! I have intial investment from min(10lakh) nd max(40lakh)+land! So plz suggest me the type of products can be manufacturd in this range!
Posted by:Gagan
- 04 Sep, 2009
5:
Think of a good English teaching machine first.
Subhash Replied to: Gagan
- 09 Sep, 2009
6:
Learn how to spell "Entrepreneur".
Rahul Ravindran Replied to: Gagan
- 05 Sep, 2009
7:
Mr Rahul,Don't critic any one for grammatic. Try to tech them tha t young guy will en light our country and at least 10 families.
Arul Replied to: Rahul Ravindran
- 06 Sep, 2009
9:
It's basically lack of infrastructure and forecasting predictions.We have sufficient man power as well as resources.Requires a proper harmonizing plan and will to execute by the various govt. institutions.
Posted by:k.gopala krishna
- 03 Sep, 2009
10:
Govt is not spending on R&D. The steps to increase the R&D Sspending should be expedited.
Posted by:aby
- 03 Sep, 2009
11:
Government of India is not interested at all in R & D. It is interested in making easy money. It discovers many creativev ideas to earn bribe.
Posted by:Anil
- 03 Sep, 2009
12:
Government of India has no work rather than to show that there is no price rise by showing the inflation rate negative. It don't care for its people who are sleeping hungry, not getting balanced diet due to rise of price of every essential eatables like pulses and vegetables. It also don't bother with anyone who suicides. It has one strong point in its bag to say that the person has not died of hunger but due to disease. But ask these mad ministers, why a person gets disease? If a person has no access to balanced diet dut to price rise and due to layoff from his / her company that person will starve. So it seems to me that taking birth is itself a crime and taking higher education is another crime. The third crime is becoming honest and humble. I have bitter experience that an honest person can't live his/her life peacefully. There are many organs of the government to cheat and annoy that person like police. The main work of a police in India is to take bribe from every shopkeeper. Also they keep an eye on the local goons and help them to commit every type of crimes.
Posted by:Anil
- 03 Sep, 2009
13:
Indian Companies are generally driven by turnover quickest ROI, and of course profits. The idea is to buy directly usable technology and convert raw material to finished goods in the shortest possible time. Ours business community has mainly been a trading community rather than one pioneered by a base level manyfacturer. All the world over the first generation manufacturers were the discoverers themselves. It is only after a base level of technological expertise has been available that the others have contributed to the industrial growth- like the banks in Switzerland. We has better artisan or manufacturer-based industry in the British days than after Independence. Though our first PM, Pt.Jawaharlal Nehru had brought in technology by the buying/borrowing route(also called collaboration) and had also laid the foundation of several research institutions, much of their work never found its way into manufacturing.We as a society have not much respect for research. Our hopes must be pinned on the generation that follows the surfeit of finnacial resources that rae available now nad henceforth, and not much on the current generation!
Posted by:MAHADEVA S SARMA
- 03 Sep, 2009
14:
what ever goods we are importing are well equiped and checked has per given documents then no problem of using those goods
Lalitha Replied to: MAHADEVA S SARMA
- 03 Sep, 2009
15:
An issue like the one brought up in the daily bulletin of Silicon India under estimates the under lying faulty planning of the government.
Look back to the formative years of the 70s and 80s where it was the 'electronics industry' that ruled. The only difference was that the entire project - any manufacturing program by any electronics industry - was a screw driver technology.
The government doled out import licenses and products were imported in semi knocked down(SKD) form or completely knocked down(CKD). As in all licensing practices money changed hands and both the local business and the officials and politicians made huge amounts of money. Business used to be more concerned about the Import Export Policy that was announced around the budget. No one really cared for the budget figures.
Once the liberalisation took place the charm of the business vanished as global players stormed the bastion.
What happened to the original players? They are happily ensconced and probably working the reality market.
Manufacturing and know how are serious endeavours. In the 2 decades of electronics there was no inclination to develop any indigenous expertise. All we heard was Import Substitution, which really translated to products at huge mark ups and very very shoddy.
Well today we do have a local industry in ITeS. And as it is been mentioned time and again, ITeS developed as our politicians did not interfere.
Look back to the formative years of the 70s and 80s where it was the 'electronics industry' that ruled. The only difference was that the entire project - any manufacturing program by any electronics industry - was a screw driver technology.
The government doled out import licenses and products were imported in semi knocked down(SKD) form or completely knocked down(CKD). As in all licensing practices money changed hands and both the local business and the officials and politicians made huge amounts of money. Business used to be more concerned about the Import Export Policy that was announced around the budget. No one really cared for the budget figures.
Once the liberalisation took place the charm of the business vanished as global players stormed the bastion.
What happened to the original players? They are happily ensconced and probably working the reality market.
Manufacturing and know how are serious endeavours. In the 2 decades of electronics there was no inclination to develop any indigenous expertise. All we heard was Import Substitution, which really translated to products at huge mark ups and very very shoddy.
Well today we do have a local industry in ITeS. And as it is been mentioned time and again, ITeS developed as our politicians did not interfere.
Posted by:Arindam
- 03 Sep, 2009
16:
The real fact for Indians not being good in R&D is
1. Indians have learnt the lesson of slavery since ages, the time of kings then Mughals to britishers. They want someone 2 decide for their life and choose what they should do. nobody wants to do anything by his own. There are people but very rare.
2. Indians spend most of their time in enjoying the little bit resource they have rather than building resources. They would rather sit in front of television and watch cricket for days, spend hours of time watching movies or planning for movies but would hardly spend any time to think how to improve things around. Indians basic attitude towards fan following and worshipping the famous people makes them not eligible for being great themselves.
3. Lack of patriotism hurts the country is hurting India more than anything, People hardly care for the country and have all sorts of reason to blame the government and others for lack of facilities and growth of India. People need to be aware of the responsibilities for their country and should spend atleast 1% of their time in thinking how one can improve the situation of the country.
1. Indians have learnt the lesson of slavery since ages, the time of kings then Mughals to britishers. They want someone 2 decide for their life and choose what they should do. nobody wants to do anything by his own. There are people but very rare.
2. Indians spend most of their time in enjoying the little bit resource they have rather than building resources. They would rather sit in front of television and watch cricket for days, spend hours of time watching movies or planning for movies but would hardly spend any time to think how to improve things around. Indians basic attitude towards fan following and worshipping the famous people makes them not eligible for being great themselves.
3. Lack of patriotism hurts the country is hurting India more than anything, People hardly care for the country and have all sorts of reason to blame the government and others for lack of facilities and growth of India. People need to be aware of the responsibilities for their country and should spend atleast 1% of their time in thinking how one can improve the situation of the country.
Posted by:Sachin
- 03 Sep, 2009
17:
i agree u the main problem with India is the attitude of people towards their respo..Indian people follow the path of western countries without knowing the needs and problems of own land.we should initiate d research and development at d grass root level that is college.very few students r interested in Research work in comparison to china.another problem is that we India fail to implement d things bcoz of Corrupt system & lazy public....Jaago India Jaago
abhishek kumar singh Replied to: Sachin
- 06 Sep, 2009
18:
Dear Friends, I am working since last 6 year in Electronics R&D. But unfortunately all my efforts are for MNCs. Right now what US companies are doing is doing R&D from Indians and importing Hardwires from chaina and selling us with their brands.
Posted by:Nanda
- 03 Sep, 2009
19:
come and work for tejasnetworks dude:) it is pure Indian R and D firm.
vinyas Replied to: Nanda
- 03 Sep, 2009
20:
Yes , but there are alot of Indian minds working in china and U.S if provided with the right kind of infrastucture which can hold them financially as well as technically the percentage of imports can decrease, however keeping that aside we cannot use this an excuse and stop working on decreasing the dependency level on foreign imports.
Posted by:Will
- 03 Sep, 2009
21:
Many years ago we had protection against imports & we were having only Ambassadors & Premier Padminis on the roads. They never thought of upgrading their models. So both cars are as good as dead today. Our BAbus were most interested in making money & not investing in R&D so are today's Babus also. Let us get along with foreign products.
Posted by:sheshadri
- 03 Sep, 2009
22:
Dear Friends,
I understand the heat that is coming from some of the comments. Indeed, there are n number of reasons why we Indians do not produce innovative results.
1. It is in our genes: Didn't it all started long back when our kings let Moghuls and foreigners enter undevided India and allowed them business? We sold our soul that very moment.
2. We borrowed our education system and constitution from others. Therefore, there is nothing left for imagination, creativity and innovation. We have always been copy cats. Do you remember any invention that was done in India? Please don't mention zero.
3. We are too lazy to think beyond our comfort zones. Please tell me honestly how many of us think of new or different ways of doing things? Do we allow our children to think beyond becoming and engineer or doctor or an IAS officer? And if our kids ask us for a new field, we get insecure.
4. We are not indivisualistic: Almost all inventions have been done in capitalistic countries. Consider this, most of these capitalistic countries have individualism. That is, people think of their own life and its betterment. Still they are not selfish and love their countries. How many of us resist ourselves and others from throwing garbage on road, spitting, pissing, damaging public property etc.? We like investing (spoiling) our time in non-productive activities and that's why we don't think of R&D.
Socialism makes men weaker, because for anything and everything that goes wrong, we have the government to blame. And for anything and everything that is not there, we demand it from the government. Hence, no R&D.
I understand the heat that is coming from some of the comments. Indeed, there are n number of reasons why we Indians do not produce innovative results.
1. It is in our genes: Didn't it all started long back when our kings let Moghuls and foreigners enter undevided India and allowed them business? We sold our soul that very moment.
2. We borrowed our education system and constitution from others. Therefore, there is nothing left for imagination, creativity and innovation. We have always been copy cats. Do you remember any invention that was done in India? Please don't mention zero.
3. We are too lazy to think beyond our comfort zones. Please tell me honestly how many of us think of new or different ways of doing things? Do we allow our children to think beyond becoming and engineer or doctor or an IAS officer? And if our kids ask us for a new field, we get insecure.
4. We are not indivisualistic: Almost all inventions have been done in capitalistic countries. Consider this, most of these capitalistic countries have individualism. That is, people think of their own life and its betterment. Still they are not selfish and love their countries. How many of us resist ourselves and others from throwing garbage on road, spitting, pissing, damaging public property etc.? We like investing (spoiling) our time in non-productive activities and that's why we don't think of R&D.
Socialism makes men weaker, because for anything and everything that goes wrong, we have the government to blame. And for anything and everything that is not there, we demand it from the government. Hence, no R&D.
Posted by:Rajesh
- 03 Sep, 2009
23:
really it is shameful for us...despite having such large population n crowd of technical institutions,we r nt able to fulfill our needs..we have to rely on others...
only consumers are responsible for this as they r striving for cheapness nt for quality...i think if consumers are wanting such cheap products so at least instead of invstng for quality govt must invest some amount to produce such cheap goods so that currency could be saved.....n then saved money could be invested in R&D
only consumers are responsible for this as they r striving for cheapness nt for quality...i think if consumers are wanting such cheap products so at least instead of invstng for quality govt must invest some amount to produce such cheap goods so that currency could be saved.....n then saved money could be invested in R&D
Posted by:ashish
- 03 Sep, 2009
24:
Yes, Indian business environment does not allow to pour money into RnD. Perhaps, A strong and stringent laws are required for Chinese and other foreigner imports. Because, consumers learn from things that are available cheap in the market so they demand things cheap. Indian producers can not manufacture dirt cheap products what chinese on the other hand can.. Once all the imports are blocked, we will realize and learn to adopt to get good quality indian products and thus THE REAL growth will begin. and when companies see a consumption, for them less riskier to pour their money into RnD.
Posted by:Dharmesh Bhanushali
- 03 Sep, 2009
25:
The root cause for this problem is we the consumers. There were good number of Indian electronic product manufacturers before year 2000. When Indian market opened for global players in late 90's, we the consumers started worshiping the brand culture and forgeting the Indian products which were equally good at that time, If we didnt buy the company doesnt earn, if the company doesnt earn then they cant invest in their R&D and product research and marketting.
Best example is BPL a company started in Kerala.... read this link http://en.wikipedia.org/wiki/British_Physical_Laboratories_Group
Best example is BPL a company started in Kerala.... read this link http://en.wikipedia.org/wiki/British_Physical_Laboratories_Group
Posted by:Sujith Balakrishnan
- 03 Sep, 2009
26:
For this problem phase 1 solution is - extensive reverse engineering. Phase 2 of course is RnD.
- GB
- GB
Posted by:ganesh bhalsing
- 02 Sep, 2009
27:
A country which contributes 16% to the world population , has its share in manufacturing and consumption of electronic appliances is as low as 1% and 2% respectively. if handled properly we can do wonders in this field as well only we need to understand our potential and it should be backed by govt reforms , r&d allocations and creative ideas.
Posted by:Puneet
- 02 Sep, 2009
28:
R&D very much happens in India but for others not for India. Because neither governments nor Indian companies invest in R&D. Tax exemption should be given only for R&D investments not for withdrawing profits to Indian companies.
Posted by:Bala
- 02 Sep, 2009
29:
True. Only D&D (design and development, not R&D) that is carried out is on the name of services to foreign R&D companies. Also the innovation doesn't take place in universities except for IISc, IITs, Bits etc... education system is not capable of producing innovators and researchers.
Yogendra Replied to: Bala
- 03 Sep, 2009
30:
This report shows our government not concentrating R&D. How long we depends on another hand? Importing and exporting is a casual thing but importing 70percent of the elctronics goods its too much. what resources we didnt have?
Posted by:Karthikeyan
- 02 Sep, 2009
31:
The Electronics Goods may be imported from U.S and China but we need look deeply.Surely a Indian mind will be there, as we are a growing nation we cannot able to expect private investors from INDIA those who are investing in R&D will be foreign investors of course they will produce where they can see some profit but from where the prototype is supplied?
Posted by:Ezhil
- 02 Sep, 2009
32:
Its not new, Indian companies have been dependent on the U.S. and China since long
Posted by:Tannuchandra S
- 02 Sep, 2009
33:
its simple friends kapilsibal invesing 2-3lac crores on for educating children of india and also he is planning to make reservation policy for faculty recruitments in IITs so ask question to intelligent people like Kapilsibal who is troductiong reservation system for IITs not IIT students or faculty?
poorna Replied to: Tannuchandra S
- 02 Sep, 2009
34:
i really think over here is too much of R&D on blaming to ourselves for not being looked on what we need to develop. One really has to think about the infrastructure,resources and man power added to that being supportive.
A entrepreneur in india if you take an example like TATA,RELIANCE,HERITAGE,ADITYA-BIRLA,GVK,GMR and many more indian companies they never give up. So, what i really think is those who are in the process of development of R&D they should never give up in their ideologies what they want to achieve. If they are deligent in the process then sure our indian electronics can export more number of percentage goods to the outside markets.
A entrepreneur in india if you take an example like TATA,RELIANCE,HERITAGE,ADITYA-BIRLA,GVK,GMR and many more indian companies they never give up. So, what i really think is those who are in the process of development of R&D they should never give up in their ideologies what they want to achieve. If they are deligent in the process then sure our indian electronics can export more number of percentage goods to the outside markets.
Susheel Sidhanti Replied to: Santosh
- 06 Sep, 2009
35:
Yes its true..
Most of the r&D is being done by indians but abroad.
Example intel , bose Radio, there are plenty.
Most of the r&D is being done by indians but abroad.
Example intel , bose Radio, there are plenty.
utsav Replied to: SAP
- 03 Sep, 2009
36:
IITians are working in US. so not to worry we get product what Indians design.
SAP Replied to: Santosh
- 03 Sep, 2009
37:
Forget it! Indians can never do R&D or bring in some creativity, they just want to be risk-free and always dependent on China and other countries.........
Aarif Replied to: Santosh
- 03 Sep, 2009
38:
Few IITians want to stay back. Maximum PhDs from US universities involved in pure-research are IITians. Thanks to Government policies and reservation.
Yogendra Replied to: Santosh
- 03 Sep, 2009
40:
Is there no moderation on this forum .. at least for the language .. is that the image we want the chinese to carry while reading?
ravinder Replied to: Real Bro
- 02 Sep, 2009
41:
This is very irresponsible response. This kind of attitude has led the situations we are in. How do we pay for these? We have to export our raw materials and we employ them. We let them innovate. We put their chips/circuits in our machines - military or health or others.
I hold all the EE programs in Indian Universities accountable. What are they teaching? Only IT? Because it is simple - just get a computer and sit in front of it. We have become hand and brain lazy.
There was a time Indian students in US were outstanding in circuit design, motors and generators, power etc. Not any more. Students from Turkey and Iran are much better in circuit design. Of course far east students are superb in electronics.
What are IITs doing?
I hold all the EE programs in Indian Universities accountable. What are they teaching? Only IT? Because it is simple - just get a computer and sit in front of it. We have become hand and brain lazy.
There was a time Indian students in US were outstanding in circuit design, motors and generators, power etc. Not any more. Students from Turkey and Iran are much better in circuit design. Of course far east students are superb in electronics.
What are IITs doing?
Santosh Replied to: Real Bro
- 02 Sep, 2009
Beautiful and dress selection, please go to Dresses
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