The revision of the software exports target from $60 billion to $80 billion by Prime Minister Manmohan Singh last week shows a clear vision — to make India a global hub for innovation and knowledge-based sectors like information technology (IT). But while software exports and development in India have mainly grown to feed multinational companies across the globe, there may now be a need to look at developing a strong hardware and electronic industry in India.

Since the information-communications-technology-electronics (ICTE) sector is strategic as it cuts across all verticals, it is essential that the ICTE hardware sector be provided a long awaited impetus. This will serve a dual purpose. One, it will provide a domestic option to the growing number of companies in India that are investing in ICTE to improve production and processes within their factories and offices. And two, it will provide a large domestic market for the software industry, which can then build greater capacity to tap export markets better.

In our view, the government needs to quickly make India a global ICTE manufacturing hub and position the country among the top five ICTE manufacturing nations in the next five years (by the terminal year of the 11th Five-Year Plan). While ICTE is the fastest growing industry worldwide, India accounts for less than 1 per cent of the global ICTE production. China accounts for 10 per cent. In the next five years, therefore, India needs to reach a total output of $70 billion, making it the fourth largest manufacturer in the world of ICTE products after China, Japan, US and South Korea.

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