Bengaluru, Feb. 1: At the India Semiconductor Association’s (ISA) annual Vision Summit, Mangalorean Ignatius Orwin Noronha was drawing quite a crowd. A strange looking jar-sized device sat on a table that also displayed innumerable posters and certificates. If the device works when it hits the market in three months’ time, Noronha could well be called India’s ‘Mosquito Man’.

The system, MozziQuit, is a mosquito trap. The exterior of the instrument uses special additives that are not chemicals — it attracts mosquitoes once switched on. They are sucked into the device and killed by a heating element. The eco-friendly trap is expected to retail for less than Rs 3,000.

But what was a system to end mosquito menace doing at a semiconductor event? The device is powered by electronic components, and some silicon.

India’s $3 billion semiconductor industry has realised that to grow, promoting itself may not be enough. It needs to nurture the ecosystem that uses its chips and influence the government into promoting domestic systems design and manufacturing. The more electronic products India churns out, the more chips semiconductor firms sell.

However, it is easier said than done. India’s growing middle class does have a huge appetite for electronic consumption. The country has 350 million people earning between Rs 2 lakh and 5 lakh annually — their aspirations are creating a huge demand. The Indian industry fears, China and Taiwan, will make the most of the opportunity.

India is still not cost competitive compared to these countries; a cheaper product, even from a less friendly neighbour, can be seductive. Imports already form the majority — about 80 per cent — of India’s electronic consumption of $45 billion. If unchecked, the trade imbalance can touch $296 billion by 2020, crossing perhaps the country’s oil import bill, industry executives warn.

The trade deficit — imports are higher than exports — means loss of valuable foreign exchange for the country.

So boosting local manufacturing is a solution; if the manufacturing index inches up, the trade deficit will be taken care of.

The Indian semiconductor industry’s lobby body ISA, therefore, is tweaking its agenda — from just promoting chip design companies and solar manufacturing, it is now talking about system design firms.

"Now it is semiconductors, systems, and solar. It’s a big ‘S’ in ISA," corporate vice president and MD of EDA firm Synopsys Dr. Pradip Dutta says. "We realised there is a lot of work that needs to be done to make India an attractive country for systems. Why is it that every set top box has to come from China?" he asks.

B V Naidu, chairman of ISA and head of a task force set up by the Department of IT to promote the electronics ecosystem said recommendations have now been submitted. When implemented, they could make Indian system firms more competitive compared to China.

The recommendations implode the government to take a strategic view of the sector given that by 2020, the electronics industry can employ 28 million. Currently, it employs 4.4 million people.

It suggests the establishment of a ‘National Electronics Mission’ — a nodal agency for the electronics industry within the Department of IT and with direct interface to the Prime Minister’s Office. It would ease doing business.

Other recommendations seek promotion of existing clusters and creation of new ones, creation of a R&D fund, a manufacturing value-add fund, rationalisation of the tax structure, and promotion of skills.

Goutam Das