NY Times: “The government of India, home to many of the world’s leading software outsourcing companies, wants to replicate that success by creating a homegrown industry for computer hardware. But unlike software, which requires little infrastructure, building electronics is a far more demanding business. Chip makers need vast quantities of clean water and reliable electricity. Computer and tablet assemblers depend on economies of scale and easy access to cheap parts, which China has spent many years building up.
So the Indian government is trying a new, carrot-and-stick approach.
In October, it quietly began mandating that at least half of all laptops, computers, tablets and dot-matrix printers procured by government agencies come from domestic sources, according to Dr. Ajay Kumar, joint secretary of the Department of Electronics and Information Technology, which devised the policy.
At the same time, it is dangling as much as $2.75 billion in incentives in front of chip makers to entice them to build India’s first semiconductor manufacturing plant, an important step in building a domestic hardware industry.
But like so much of India’s economic policy, it’s doubtful that either initiative will have the impact the government is intending.”
via India, Known for Outsourcing, Now Wants to Make Its Own Chips – NYTimes.com.
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