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How India Is Going To Make Itself Self-Reliant Wrt Growing IoT Demand?
It is a huge opportunity and challenge for the Industry to make India “AtmaNirbhar”. Let us look at the IoT elements for which India is still dependent on other countries
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The Internet of Things (IoT) in India now is not a thing of the future, it is growing and thriving right in front of our eyes. From Smart appliances to Smart Energy metering, from Industry 4.0 to Smart vehicles, IoT powered products are touching our lives on a daily basis. The estimated market size of IoT is set to reach USD 20 Billion by 2024.
Looking at this growing market alongside Prime Minister Modi’s call to make India “Self Reliant” or “AtmaNirbhar” unearths some very interesting aspects. Particularly because building blocks of any IoT product or solution require the seamless amalgamation of hardware, cloud stacks, mobile applications, data analytics, and artificial intelligence (AI), it is a huge opportunity and challenge at the same time for the Industry to make India “AtmaNirbhar”. Let us look at the IoT elements for which India is still dependent on other countries:
Semiconductors and Electronics components
With respect to semiconductors and electronics components, PM Modi’s call to make India “Self Reliant” or “AtmaNirbhar” is a clarion call for action, to an industry that has more or less accepted the status quo, regarding their reliance on imports from countries such as China, Taiwan, Korea, and other countries. The dependence is so massive that our entire supply chain crippled and disrupted during the COVID-19 lockdowns.
The challenge that India faces is that there are no domestic alternatives to manufacturing semiconductors and such electronics components. Hence, campaigns to boycott Chinese products seem more paradoxical than realistic. You can only boycott something that is alternatively available.
So what is the solution?
As per Indian Electronics & Semiconductor Association (IESA), the Indian semiconductor industry is growing at 10.1% annually, is set to be worth $ 32.35 billion by 2025 which establishes the demand.
Here we need to understand that we are not just trying to create a product line but an entire industry and we would need to take a long-term holistic approach. It can begin by building an eco-system that caters to all the stakeholders spearheaded by the Indian government by laying out the right policy framework and incentive provisions and supported by the industry in terms of capital infusion for capacity building.
Unfortunately, in the last decade, two attempts to set up semiconductor fabrication units have failed. Hindustan Semiconductor Manufacturing Corporation (HSMC), a consortium of companies that included STMicroelectronics, was aiming to kickstart chip manufacturing plant in Gujarat with an investment of ₹30,000 crores. The government in 2019 cancelled the letter of intent granted to HSMC and now there is no such proposal from any private company to initiate such a project. Another attempt was made by a consortium led by Jaiprakash (JP) Associates having partners such as IBM and Tower Semiconductor Israel to start chip manufacturing in Uttar Pradesh. However, In 2016, debt-ridden JP Associates pulled out of ₹34,000-crore project.
We need to now look for collaborations with countries experienced in semiconductor fabrication to expedite the process. The signing of MoU between India and Singapore Semiconductor Industry Association to develop trade and technical collaboration in electronics and semiconductor industries is one such step in the right direction. Further, latest announcements regarding Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) are also going to pave way for self-reliance. Said that we are already trying to catch up on close to 15 years of time lost, GoI needs to act fast on the policy.
It is important that we embark on this while understanding that capacity building for developing the semiconductor fab industry is a long haul and needs a 10 or 15 years structured road-map.
India's cloud infrastructure market is highly fragmented and is majorly proliferated by global players like Amazon, Google, Microsoft and IBM leaving very limited space for domestic players like TCS and Wipro. Global companies such as Amazon and Google are expanding their target market by investing in setting up new data centres and upgrading their existing data centres in India.
Most Indian IoT companies are relying upon Amazon Web Services, Google Cloud Platform or Microsoft Azure for the cloud infrastructure part. These services not only offer competitive prices and easy onboarding but also provide a host of custom features that makes the life of an IoT developer easier.
Moreover, with the duopoly of Amazon Alexa and Google Home in the Voice Assistant market, the IoT developers anyways develop an inclination towards their parent companies.
The law of the land should support and incentivize usage of home-grown cloud providers similar to the Chinese Govt. but not to the extent of banning other foreign players. On the other hand, Indian organizations should also dedicate a part of their revenue on R&D efforts to match the offerings of the incumbents.
Data Protection should be of prime concern. MEITY’s (Minister of Electronics and Information Technology) Personal Data Protection Bill, 2019 is a landmark move that establishes that personal data of Indian citizens should remain within the boundaries of India.
Every IoT solution requires a connectivity module such as WiFi, BLE, LoRa, UWB, GSM, etc and unfortunately, we are still importing most of them. The good part is that connectivity modules can be produced locally to cater to the growing demand for IoT. So where are the fault lines?
It’s simple. What would possibly happen when you try to challenge the factories of the world that have already achieved economies of scale? Individually, you succumb to the cost-competitiveness!
This is something that we can conquer in the near future if we are able to build a local manufacturing ecosystem very similar to China and Taiwan and have assurance from Indian industry to purchase locally manufactured connectivity modules. Again, we would need support from the Indian government to build the right framework, impose duties on such imported parts and channelize financing for organisations that undertake ventures.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.