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PM promises policy to support semiconductor industry

N. Ravi Kumar

$ 200 million Flextronics industrial park inaugurated

PHOTO: V. GANESAN

ATTRACTING INVESTMENT: Prime Minister Manmohan Singh at the inauguration of Flextronics park in Sriperumbudur on Saturday.

SRIPERUMBUDUR: Prime Minister Manmohan Singh on Saturday promised an investment environment that will create exciting opportunities for both domestic and foreign entrepreneurs.

Inaugurating the $200-million industrial park of electronic manufacturing services provider Flextronics here, located on 250 acres some 50 km to the west of Chennai, he said the Government would follow a "forward-looking policy regime" to encourage the electronics, information technology and telecommunications sector.

Some of the components of the approach to promote new investment, create employment and generate business opportunities, he said, included a policy to support the semiconductor industry and another to make electronics/IT hardware manufacturing competitive.

A galaxy of leaders, including UPA Chairperson Sonia Gandhi, Union Ministers Dayanidhi Maran, P. Chidambaram and Mani Shankar Aiyar, and the Tamil Nadu Chief Minister, M. Karunanidhi, attended the function.

Noting that the policies would be announced shortly, the Prime Minister said India was committed to reducing tariffs on 217 IT items to zero per cent, something it had agreed to at the World Trade Organization.

"This will promote greater competition, which in turn will help the development of our own electronics industry. The Special Economic Zone policy is already quite favourable for electronics manufacturing firms,'' he said.

Vocational education

The government, Dr. Singh said, was committed to establishing a Mission on Vocational Education to improve the skill base of the youth. It would expand the higher education system to provide more and better quality technical graduates for industry. The measures were proposed in the backdrop of a shortage of employees with essential skills that IT and electronics sectors could face as they grow rapidly.

Hardware capital

Stating that a journey to Sriperumbudur (where former Prime Minister Rajiv Gandhi was assassinated) "is always a pilgrimage,'' Dr. Singh it was emerging as the hardware capital of India with several world-class electronic hardware complexes being established by international firms.

He commended "Mr. Karunanidhi for his abiding commitment to the development of Tamil Nadu; Mr. Maran for the energy and enthusiasm with which he is providing leadership in this very important field; and all my colleagues [in the Union Cabinet] from Tamil Nadu.''

Ms. Sonia Gandhi said the development of Sriperumbudur was the most appropriate tribute to Rajiv Gandhi as he ushered information technology into India in the face of considerable criticism. Pointing out that those who criticised it then have become its champions today, she said the UPA Government was keen on faster application of IT for better governance.

Though lakhs of new jobs had been and were being created, there was a long way to go to bridge the digital divide. Ms. Gandhi also underscored the need to rejuvenate the traditional industries towards adding value to local resources.

Wishing Flextronics a successful and profitable operation, Mr. Karunanidhi said winning the war against hunger, want and unemployment figured uppermost in his agenda. Since empowering people with knowledge and appropriate skills could win the "war'', the efforts were focussed on creating an eco-system to attract investments from across the globe.

Union Minister for Communications and IT Mr. Maran said the proactive policies of the State and Centre made several foreign investors consider India as an investment destination. While Motorola and Dell were setting up operations in the State, Samsung was considering a similar move.

Flextronics chief executive officer Michael McNamara said an increased presence in the region was important for the company.

It also wanted to become the employer of choice in the region. Flextronics (Asia) President and Managing Director Peter Tan, and general manager and director of Flextronics India A. Gururaj spoke.

Phase I completed

Shanthi Kannan writes:

Earlier, addressing a press conference in Chennai, Mr. Tan said the first phase of the project was complete and would be operational by this month-end.

The second phase would be completed soon.

The Flextronics Park would offer vertically integrated services, including design, plastic injection moulding, printed circuit board assembly, mechanical and enclosure integration, distribution, logistics and repair services.

The Industrial Park would increase the company's existing operations in India, which included a design resources centre in Bangalore and an assembly unit in Puducherry.

Both these units would be consolidated and relocated to Sriperumbudur. Currently, Flextronics had more than 1,000 employees in India, he added.

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