The pandemic has brought about a digital transformation in our ways of working, both in daily life and business operations. People now prefer to avail of all services online; industries, too, are moving towards the digitisation of assets and operations. To improve customer experience, emerging technologies such as 5G, artificial intelligence, big data analytics, cloud computing, internet of things (IoT) devices, and augmented/virtual reality are being utilised extensively in the market. The successful implementation and utilisation of these technologies depend on the capacity and features of the underlying telecom infrastructure, such as base transceiver stations, transmission equipment, antenna systems, routers, switches and IoT devices. As new technologies emerge, opportunities to build or develop new device and equipment ecosystems also open up. India can take the lead in this space by focusing on achieving self-sufficiency in telecom manufacturing.
Currently, 85 per cent of the country’s telecom equipment demand is met through imports. Further, as per industry estimates, telecom-related exports are equivalent to just one-tenth of imports. There exists a wide gap between the import and export volumes of telecom equipment. As per a recommendation by the Telecom Regulatory Authority of India, there should be zero import of telecom gear by 2022; however, given the current state of affairs, this seems far-fetched.
Focus on atmanirbharta
A typical telecom device development ecosystem includes system design, chipset design, chipset manufacturing, and system assembly and testing. In terms of global value, system design and chipset design contribute significantly more than the mere assembly of the components. As per a report by the World Trade Organization, India’s contribution to the global supply chain is only 0.15 per cent for telecom equipment and 0.068 per cent for information-centric networking components. Hence, to achieve atmanirbharta the telecom sector should focus on design-driven manufacturing, which would help India take care of its strategic needs.
The government’s National Digital Communications Policy, 2018 emphasises local manufacturing and value addition through maximisation of India’s contribution to the global supply chain by focusing on domestic production, increasing exports and reducing the import burden. Also, the government is simplifying the manufacturing and testing licence process.
The absence of a fabrication and component ecosystem has left India dependent on other countries for the import of components. The Covid-19 pandemic has affected the global supply chain badly. This has resulted in an increase in the cost of devices as the demand for them increased while supply dwindled. This is the right time for India to take the lead – global telecom and networking product exports represent a $100 billion market opportunity, which should be exploited by India.
The industry must also focus on developing a robust security ecosystem. If we are able to manufacture indigenously, security considerations automatically get addressed. Manufacturing locally will eliminate any potential security-related concerns of the government posed by global manufacturers from particular geographies.
The way forward
Going forward, the industry should focus on design-led manufacturing by leveraging indigenous software. Research and development capabilities should be promoted instead of just assembly-led manufacturing. From the perspective of the development of a device ecosystem, system and chip design contributes to a significant portion of the overall value chain. By exploiting that part of the ecosystem, India can emerge as an effective partner in the global market. Moreover, there is an urgent need for collaboration amongst companies, which can help develop an end-to-end ecosystem of new technologies such as 5G and satellite.
At present, India has the largest user base for telecom services. There will be a continuous demand for telecom infrastructure to expand and upgrade this network. New initiatives such as the Prime Minister Wi-Fi Access Network Interface will also drive significant demand for hardware manufacturing in the country.
Lastly, all stakeholders should work together to make India a design-led manufacturing hub for the telecom sector and related products. India should deliver products globally at competitive costs and quality. To realise the aim of atmanirbharta fully, the government and the industry have to work together. Merely formulating a policy or launching a scheme will not solve the problem – its implementation is also critical. s
Based on an address delivered at a webinar on “The Digital Dialogues on Atmanirbharta in Telecom Manufacturing”, organised by the Broadband India Forum