From tourist paradise to electronics hub: Kerala aims to build laptops, EVs

Kerala has also been looking at facilitating investments in smartphone-related products, displays, tablets, routers, and handheld devices, among other things

The Communist Party of India (Marxist) had allegedly been at the forefront of the protest against computerisation in offices a few decades back in Kerala, fearing that computers might take away the jobs meant for human beings. Come 2018, the state government, led by the same party, is in the process of finalising manufacturing projects -- starting from a laptop manufacturing facility in the state in collaboration with various industry players, including global chip manufacturer Intel. 

While the plans are yet to be finalised, this will be part of the Electronics and Hardware Mission established by the government last year to attract electronics manufacturing companies to the state. 

"One of the sectors in which Kerala can attain prominence is 'electronics hardware'. A major share of electronic goods is being presently imported from China, etc. One of the emphasis of 'Make in India' campaign is on 'electronic hardware'. In this scenario, the government has envisaged 'Electronics and Hardware Mission' with a view to secure a forefront position in the field of electronic design and embedded software in India," said Kerala Finance Minister T M Thomas Isaac. 

The government had earlier earmarked Rs 300 million as seed money for the mission. The mission is the single-point contact for strategic projects and investment proposals in the sector, to present a continuity and accountability to the whole process.

"A joint venture will be started by Intel and Keltron (a state-owned public sector undertaking) to manufacture laptops and servers," Isaac said, adding that the first project is going to take practical shape during the financial year 2018-19. The government, in the state Budget for 2018-19, has earmarked an amount of Rs 400 million. 

In October last year, it had also announced plans to tie up with UST Global, which has been supporting large OEMs in testing and validation, for exploring the potential for establishing personal computer and server manufacturing in the state. An MoU had been signed with both Intel and UST Global soon after that, according to reports. The construction of a hardware park on 100 acres of land at Amballoor, Ernakulam, is in progress. 

Keltron, which has been involved in manufacturing electronic products, could regain its position as a key player in electronics manufacturing in the state as well as in the country with such projects, said state government officials.

According to sources, the government has also been looking at facilitating investments in smartphone-related products, displays, tablets, routers, handheld devices, batteries for industrial purposes, solar cells and inverters in the solar segment, medical electronic devices, automotive electronic products, and others. In June 2017, the government had examined and issued administrative sanction for setting up of an India Electronics and Semiconductor Association (IESA) International Desk in Taiwan for investment promotion in the electronic system design & manufacturing (ESDM) sector with Kerala as the associate partner state. 

The mission has mapped electronics and hardware companies and conducted a survey to identify the existing challenges faced by the companies in the state. It will propose schemes based on the real needs of hardware companies. The government has come up with an ESDM policy based on this.

Jayasankar Prasad C, the special officer for the Kerala Hardware Mission, said, "The objectives of the study were to identify the key players in the ESDM ecosystem in the state, create the inventory of assets in electronics manufacturing and identify core competencies that can be developed."

The policy envisions Kerala becoming a preferred destination for ESDM investments and becoming a leader in electronics design and embedded software in India. The key objectives of the policy are to enhance the availability of specialised skills and ready-to-absorb manpower in the ESDM sector, promote innovation and start-ups in the ESDM sector, and ensure availability of infrastructure to promote manufacturing in hardware and electronic goods.  

The major concerns identified during the exercise were that local projects were not buying from local manufacturers, which called for a Kerala-first policy, and that the hardware ecosystem lacked a proper facility for certification and testing as there were no NABL-accredited comprehensive test facilities for electronic manufacturing compliance testing in the state. Around 25 per cent of the companies asked for investment in infrastructure and 22 per cent sought for support for innovation, research and development. Around 23 per cent needed government orders for their company products and 20 per cent needed incentives for local manufacturing, said a note from the Office of Chief Minister of Kerala.

Kerala is betting heavily on electric mobility and this gives a huge opportunity for attracting manufacturing to the state, said the state government. The projects linked with converting state PSU Kerala Automobiles Ltd (KAL) into an electric vehicle (EV) manufacturing line for two- and three-wheelers have evinced good response from the industry, it said. Information communication technology hardware and peripherals are also a good option as the state is investing heavily in improving its digital presence in e-governance and related activities. 

"There have been extensive consultations in the area of EVs, IT hardware and components with industry bodies, OEMs and experts from Japan and Taiwan, the indications are encouraging," it said.

The possibility of leveraging the existing strengths to enable a power electronics cluster in the state is also being explored. There are large players who have shown interest in relocating their manufacturing operations to the state taking a cue from the successes of SFO, Amphenol FCI OEN, OEN connectors, V Guard, etc.  

The government is also looking at skill development programmes to ensure that there is adequately skilled manpower for the job roles in these units. "Kerala Start-up Mission and a host of other incubators, including the electronics incubator (Maker Village) and Medical devices Incubator (TImEd), etc, are clearly laying a road-map for entrepreneurial development in this area. The hardware ecosystem has been seeing a great boost with more and more start-ups focusing on hardware start-ups and a few of them getting international acclaim and acknowledgement. The overall maker culture has been strengthened by the fab lab network set up with the support of MIT," said the note.