The general distrust against China following the COVID-19 outbreak could be an opportunity for India’s state governments to try and attract investments into the electronics manufacturing sectors, Union Minister Ravi Shankar Prasad said Monday. In his conference with state IT ministers, Prasad said that states should be “proactive” when such as opportunity comes, as there will “anger against China”.
“That opportunity for India is going to come. We have already announced many incentives and I would like that the states play a crucial role by attracting such investments,” Prasad added. Though electronic products from any country would be subject to security audit, the same would be more intense for Chinese products, the Electronics and IT Minister said. “We are not against any country … we are only pro-India. We are committed to India and will take measures to create opportunities for India. As regards security initiative are concerned … any product coming from any country, particularly China, we expect proper security audit and verification.”
On March 22, the Cabinet had approved three schemes worth Rs 48,000 crore for promotion of electronics manufacturing in the country. Apart from direct production-linked incentives for companies, the government had also announced two schemes under which electronics manufacturing units could get benefits for setting up plants at remote or underdeveloped locations.
Abundance of labour an advantage
With nations across the globe laying the blame on China for hiding the actual information on Covid-19, big multinational corporations are likely to shift base to other nearby cheap labour countries like Taiwan, Indonesia and India. At the forefront with the maximum available labour, India wants to position itself as the next low-cost manufacturing hub. Domestic electronics sector, which as of now provide auxiliary items and assembles products, could also get a boost once the high-end device manufacturing units decide to shift base to India.
The Centre’s initial plans to make India a hub for high-end large electronics equipment and semiconductor units hit a roadblock after most global companies opted to assemble in India rather than set up manufacturing units.
The Economic Survey 2019-20 noted this and observed India should follow the China model of becoming an assembling hub for the world for ‘network products’ such as computers, electronics, and road vehicles to raise its share in the world export market.
Reviewing the domestic situation of the information technology (IT) industry, Prasad said that over 95 per cent of employees in the sector were working from home, according to data by Nasscom. To further facilitate work from home measures and ensure social distancing, the government has decided relax the norms till July 31.
The government is also monitoring the spread of fake news and has alerted all social media intermediaries to ensure that any articles or news which can fan communal tension due to any misinformation on COVID-19 must be taken down immediately, Prasad told reporters via a virtual press conference after his meeting with state IT ministers.
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