Ajai Chowdhry, the visionary Founder of Electronics Products Innovation Consortium and Co-Founder of HCL, recently emphasized the need for a significant overhaul in India’s logistics, both for imports and exports.
India aspires to position itself as a global hub for electronics and semiconductor manufacturing. However, the nation faces a critical hurdle in the form of inefficient logistics, both on the inbound and outbound fronts, according to Mr Chowdhry. Despite the introduction of the Government of India’s ambitious Gati Shakti – the national master plan for multimodal connectivity – more comprehensive measures are imperative.
Mr Chowdhry emphasized, “India’s inward and outward logistics need significant improvements. The ease of doing business is still lacking. When it comes to manufacturing locally, obtaining all the necessary components poses a challenge. Importing components from multiple countries is common, and these components must reach India swiftly and seamlessly.”
Drawing parallels with the success stories of Taiwan and Vietnam, Mr Chowdhry pointed out their streamlined processes. “In these countries, components arrive in the morning, get integrated into products by the afternoon, and are shipped out the very next morning. The electronics industry demands this kind of efficiency, vastly different from other sectors.”
As a key participant in NITI Aayog’s program for electronics, telecom, and automotive sectors, Mr Chowdhry revealed ongoing efforts to integrate India into the global value chain (GVCs). Acknowledging the pressing need for logistics reform in electronics, discussions with the Department for Promotion of Industry and International Trade (DPIIT) have ensued. Industry leaders, including Mr Chowdhry, have underscored the pivotal role of logistics in this sector.
Highlighting the unique requirements of the electronics industry, Mr Chowdhry noted, “Unlike other sectors with heavy components, electronics relies heavily on air logistics, with approximately 80 to 90% of component logistics being air-based. The shortage of large Air Cargo planes poses a significant challenge. I’ve raised this issue in NITI Aayog’s meetings, emphasizing the imperative to enhance air logistics for the growth of electronics and telecom manufacturing in India.”
In addition to logistics, Mr Chowdhry identified other critical areas requiring the government’s attention. He stressed the need to reduce the cost and time associated with inward logistics by establishing a multitude of component warehouses in India. “Currently, major component distributors maintain warehouses in Singapore and Hong Kong, causing delays. For efficient manufacturing in India, warehouses need to be established here,” he explained.
Credits: Business Today