Economic Analysis of Electronic Sector - Essay Example

The electronics industry is center star in today’s transforming and globalizes market. As such, improving and even accelerating high technology innovation, while ensuring its propriety, will be instrumental if the world is to maintain its competitive advantage for continued economic prosperity and indispensable national security. India is the fifth largest economy in the world and has the second largest gross domestic product among the emerging economies.

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Owing to its large population, the potential consumer demand is ever increasing and consequently under appropriate notations, strong growth performance can be expected. The liberalizing of the Indian economy that began In 1991 has started changing regulatory, financial, and monetary policies leading to a higher pace of growth. The software industry in India is already a world leader. Electronics and Information Technology is the fastest growing segment of Indian industry both in terms of production and exports.

Today, the electronics industry Is completely diligences with the exception of aerospace and defense electronics, and along with the liberalizing in foreign investment and sport import policies of the entire economy, this sector is attracting considerable interest not only as a vast market but also as potential production base by International companies, The Electronics Industry in India took off around 1 965 with an orientation towards space and defense technologies.

This was rigidly controlled and initiated by the government, This was followed by developments in consumer electronics mainly with transistor radios, Black & white TV, calculators and other audio products. Color Televisions soon followed. In 1982-a significant year in the history of television in India – the government allowed thousands of Color TV sets to be imported into the country to coincide with the broadcast of Salsa Games In New Delhi. 1985 saw the advent of Computers and Telephone exchanges, which were succeeded by Digital Exchanges in 1988.

The period between 1984 and 1990 was the golden period for electronics during which the industry witnessed continuous and rapid growth. From 1 991 onwards, there was first an economic crises triggered by the Gulf War which was followed by political and economic uncertainties within the country. Pressure on he electronics industry remained though growth and developments have continued with distillation in all sectors, and more recently the trend towards convergence of technologies.

After the software boom in mid asses Indian’s focus shifted to software. While the hardware sector was treated with Indifference by successive governments. Moreover the steep fall in custom tariffs made the hardware sector suddenly vulnerable to international competition. In 1997 the TIT agreement was signed at the WTFO where India committed itself to total elimination of all customs duties on IT reward by 2005. In the subsequent years, a number of companies turned sick and had to be closed down.

At the same time companies Like Moser Bare, Samuel Color, Celebration etc. Have made a mark globally. 1 OFF In recent years the electronic industry is growing at a brisk pace. It is currently worth IIS$ 32 Billion and according to industry estimates it has the potential to reach IIS$ 150 billion by 2010. The largest segment is the consumer electronics segment. While is largest export segment is of components. The electronic industry in India constitutes Just 0. Per cent of the global electronic industry.

Hence it is miniscule by international comparison. However the demand in the Indian market is growing rapidly and investments are flowing in to augment manufacturing capacity. The output of the Electronic Hardware Industry in India is worth IIS$11. 6 Billion at present. India is also an exporter of a vast range of electronic components and products for the following segments Display technologies Entertainment electronics Optical Storage devices Passive components Electromechanical components

What is contribution this sector in the overall industrial production or service sector: Role of Electronics and Hardware Industry in India GAP is crucial for the development of the IT and the TIES sector in India. Electronics and hardware are the major components of several industrial sectors such as Information Technology sector, Telecommunication sector, Automobiles sector, Electronic appliances sector, Special Medical equipments sector, etc.

India-Hub of Electronics and Hardware Manufacturing India has become one of the favored destinations pertaining to the electronics ND hardware The growth of the Electronics and Hardware Industry in India due to the favorable conditions for the electronics industry The Government policies are also helping the growth of the electronics and hardware industry The Policies pertaining to investments are attracting foreign players in this industry The manufacturing of the semiconductor is the most important area pertaining to the electronics and hardware industry The semiconductors are used in all kinds of electronic equipments such as cell phone, personal computers, laptops, other implementations in automobile sector, medical equipments,etc India Semiconductor Association (SIS) is the apex agency pertaining to the semiconductor companies and chip design firms in India Advantages of Indian Electronics and Hardware Industry Multi national corporations can provide to the growing electronics market in India at lower costs by manufacturing semiconductors in India India has the potential to come up as the next electronics and hardware destination in the world The chip design and other complex components electronic device can be acquired from the Indian companies at low cost India is growing up to be one of the biggest markets for electronic instrumentation The consumption value of electronic equipment in India in 2005 is estimated as IIS$ 28. 2 billion The main factor pertaining to the demand The growth in the manufacturing of semiconductor is the key driver in the emergence of India as one of the leaders The advantages pertaining to the taxes and duties, the access to technical and engineering expertise, proper manufacturing facilities, lucrative investment offers, etc Electronics and Hardware

Industry in India GAP-Rising steps Role of Electronics and Hardware Industry in India GAP growth has been phenomenal India provides immense opportunities for electronic instrumentation manufacturing The projected production within the year 201 5 would worth IIS$ 155 billion The development of the electronics and hardware consumers ensures the growth of the industry PURPOSE 1) We focus on the electronics sector for several reasons. Firstly, it is a sector which is expanding rapidly and whose effects are permeating the production structures of ritually every activity in the manufacturing and service sectors. Secondly, it is a sector which in principle has a high level of globalization potential. Its production is effectively footloose, being virtually independent of resources other than capital, for which there is now a global market, and labor, both skilled and unskilled.

Thirdly, because of the relative weightlessness of many of the products of the sector, transportation costs, which can often play a vital role in linking production to consumption, are a trivial part of total costs. For these reasons, differences in factor sots, effectively the costs of skilled and unskilled labor, can drive the global production location decisions for different fragments in the production process. 2) Indian Electronic Industry today accounts for very feeble parts of total GAP. SST Microelectronics, Parrot Communication, Shaken are some of the very few indigenous electronic firm that are involved in research and development in the field of electronics.

Today, 60 years after independence as Indian economy continues to beat many a odds but till date no electronic firm has an electronic manufacturing facility n India. Being a student of Electronics Engineering, we would like to purpose the detailed study and analysis of every aspect of Electronics industry so as to utilize our resources to the fullest. 3) We propose to discuss all the governmental policies that have been implemented by the state to encourage the electronic industry and those which are still lying on the table to get recommendations. 4) We would like to highlight some of the major milestones of this industry with the help of some case studies that we have done.

We have chosen the companies that are dominating the roll market and the Indian Territory. 5) Finally we would like show how Indian company that have its market concentrated in its domestic territory, is not little influenced by the recession and what are the counterparts faced by the multinational company. 6) We would like to summarize the current thinking on intermediation and disintermediation, extract candidate drivers for this cycle, capture the expert opinions on what is driving the cycle and determine the quantitative and qualitative conclusions related to the electronics industry supply network integration and requirements for its success.