No local design capability, no ECMS payout, says Ashwini Vaishnaw

Minister Ashwini Vaishnaw says approvals and disbursals under ECMS may be revoked if firms fail to develop in-house design capabilities and meet quality standards

The Union government will not hesitate to revoke approvals given to companies under the Electronics Component Manufacturing Scheme (ECMS) if the approved projects do not begin setting up and incorporating in-house design capabilities in India, Union Electronics and Information Technology Minister Ashwini Vaishnaw said on Monday.

 

Speaking at an event to distribute approval letters for the fourth tranche of projects that have got the go-ahead under the scheme, Vaishnaw said that despite the industry promising to start a collective effort toward in-house design by March, there had been no progress on this.

 

“We have to get into electronics, machine and component design. Design has to be a primary focus. If anyone has any doubt about this, and they want to proceed without including the design component, they can opt out of the programme (ECMS), and we will not hesitate about it, no matter how large the company is,” Vaishnaw said.

   

Over time, firms that do not invest in setting up domestic component-design capabilities in India will be “weeded out” of the ECMS, he said.  

Apart from seeking inputs on domestic design capabilities, the government will prescribe how to set up seller-buyer meetings under the scheme, Vaishnaw said, adding that the industry’s inputs sought by the government were lacking here as well.

 

“Now you will have to have buyer-seller meets in a structured way so that domestic companies get ample opportunities. We will have to come up with a monthly programme for this,” Vaishnaw said.

 

The minister also urged the electronics component-manufacturing industry to develop structured programmes to achieve Six Sigma manufacturing quality, which can be scaled up across all companies, especially among micro, small, and medium enterprises (MSMEs) approved under the scheme.

 

“Within the next 15 days, you must tell us the schedule for all the 75 approved projects and who these companies have associated with for achieving the Six Sigma quality. Otherwise, we will have to prescribe the way ahead,” Vaishnaw said.

 

Though companies under the scheme have taken individual steps to equip personnel for their respective projects, there is a need to set up four-five focused centres where 5,000-10,000 people can be trained in one batch, he said, adding that if this was not done, the lack of quality manpower would be a constant problem for all electronics manufacturing companies.

 

“I am repeating this, but we have not got the desired help and support from the industry on these aspects. I am not very happy with the progress that the industry has made,” he said.

 

Urging the industry to develop structured plans for the four components, Vaishnaw said these would help it become more organised and achieve higher production quality.

 

“Please put in more efforts, or else we will stop the approvals. I am willing to take harsh measures. I am willing to stop any further disbursements or approvals if the industry does not come out with commensurate measures,” he said.

 

Under the ECMS scheme, the government on Monday approved a fourth tranche of 29 projects with an overall projected investment of ₹7,104 crore. Of these, India’s first ever project for the manufacturing of passive surface-mount devices and rare-earth magnets has also been approved.

 

With this, the government has now approved applications of 75 companies to set up component manufacturing for various modules, sub-modules, and passive components such as antennas, capacitors, connectors, display module sub-assembly, heat sinks, laminate, flexible printed circuit boards, among others.

 

Investment across these 75 projects is estimated to be ₹61,671 crore, with an expected production value of ₹4.51 trillion over the course of the scheme.

 

Vaishnaw on Monday also said that the electronics and semiconductor manufacturing companies in India had so far not raised any alarm on the West Asia crisis, especially when it came to the supply of raw materials and exports of finished products going through the Strait of Hormuz.

 

“It (West Asia crisis) is an evolving situation, and we will continuously keep interacting with the industry,” Vaishnaw said.