The Electronics Industry – CLI(c)King together

- An interview with Jawad Basith, President,

Consortium of Electronics Industries of Karnataka

 

Jawad Basith is the CEO of Soilid State Systems Pvt. Ltd. He is also the President, Consortium of Electronics Industries of Karnataka (CLIK). In the past, he has held active positions in ELCINA (as its President) and PCTC (as its President). This interview focuses on his personal views on the direction and pathway that is to be taken by the Indian Electronics Industry.

 

indiamarkets: What role does CLIK play in Karnataka Electronics?

 

Jawad Basith : First of all, I would like to define the word “Electronics Industries” – CLIK encompasses all the manufacturing and service industries directly related to Electronics. This would also include the Software industries, and indeed, an electronic media group like indiamarkets might also become members.

 

While, we are primarily focused on Karnataka, it is becoming increasingly difficult to limit ourselves to within this geography. In fact, our members have factories out side Karnataka, and thus we reach out to other geographies also.

 

Our activities are primarily in information dissemination; government interaction and we also help our members actively promote their business.

 

indiamarkets: The word “Consortium” implies group buying and selling. Does this have any specific relevance?

 

Jawad Basith : To be very frank, the word “Consortium” might as well be replaced with “Association”.

 

We are undertaking certain consortium buying initiatives, but it is very complex in an association such as ours because of varying buyer requirements, unlike in a homogenous association such as a capacitors association, where most buyers have the same requirements. Another problem is that firms of varying sizes have varying compulsions – financial and commercial.

 

indiamarkets: Can you elaborate a bit more on your activities?

 

Jawad Basith : As I mentioned earlier, we have three focus areas: Information Dissemination, Active Marketing support and Interaction with the government.

 

To facilitate information dissemination, we collate and circulate information on Government Policies, Business Opportunities, Export related information, new technologies, new business mediums like the Internet.  We have recently been co-organized the WAPCON, held in IISC recently, which dealt with the WAP technology. We have also organized seminars on Benchmarking, and will be conducing one in the near future also.

 

In a bid to provide active marketing support, we organize buyer-seller meet, meets with visiting foreign delegates, block bulk space in trade fairs to get our members better deals and so on.

 

We have an MOU with ELCINA (Electronics Components Industries Association – they furnish us with all national level information). We work very closely with FKCCI, MAIT, ELCIA in interacting with the government. We are usually invited to be in advisory panels in matters concerning policy in Electronics and IT, specially when it concerns procurement policies.

 

Earlier, we used to do a lot of work on grievance redressal for our members, but nowadays, there is hardly effort in that direction because the laws have eased out to a good extent, and the government has also become more responsible, if I may say so.

 

indiamarkets: What are the big improvement areas (Government related)?

 

Jawad Basith : Archaic procedures in Customs, Excise!!! These have to be done away with immediately. There are tons and tons of problems in consignment clearance. We also need to hasten privatizing infrastructure.

 

indiamarkets: Can you give an example on the problems faced with customs or excise?

 

Jawad Basith : Lets say I need to export capacitors; I cannot directly manufacture and send them to a clearance agent for shipping. I need to get a “Consignment Clearance”, which means that a customs official will inspect my goods, paperwork, approve it. In this process, there is a lot of scope for corruption to rear its ugly head. Inspection of goods does not happen in even 1% of the cases.

 

indiamarkets: So what solution do you suggest?

 

Jawad Basith : Automate it! There should be electronic data exchange on the Internet, and in case the Customs Department does not reply to my documents within a day, I ship it. What is the need to inspect? There are no incentives now that I can misuse and my payment comes through the RBI, and so there is a complete check. Lets say someone wanted to misuse the incentives, he would not be able to because the incentives will not be able to match the Havala rate. Earlier, capacitors used to have a DEPB of 13% and now it is 3%. When it was 13%, the margin was enough for fraudulent people to attempt a misuse. Now there is no scope for it, and hence no need to inspect.

 

indiamarkets: And regarding privatization of infrastructure?

 

Jawad Basith : Our infrastructure is really bad. We need to privatize the infrastructure, and fast. Our ports, roads, telecom… everything needs quick revamping. And wherever the efforts are on, such as in Telecom, there are too many potholes and obstructions, with far too many political considerations taking precedence over economic matters.

 

indiamarkets: What are the implications of the upcoming WTO regulations on the Indian Electronics industry?

 

Jawad Basith : All the associations have accepted that the WTO regulations are here to stay… there is nothing that any of us can do that can stop the regulations. All large and medium sized players have also understood the same, and so have most of the small industries. So, we have to think in terms of what we need to do, and what we need to do is compete globally.

 

We need to benchmark against the global standards in whatever parameters are relevant – Technology, Scale, Quality, Delivery etc.

 

indiamarkets: Given that most of the small-scale industries in India will not be able to compare on the above parameters, will they be dealt the death blow?

 

Jawad Basith : No, I do not think so. An exporter to India will have to incur around 10% as costs in inventory, logistics, clearing, LCs, and other such expenses. It is within this 10% that we would need to compare with him, and if in spite of all this, his products are cheaper, there is a real issue.

 

indiamarkets: Do you see potential for Technology Transfers, Joint Ventures, Contract Manufacturing, etc?

 

Jawad Basith : Absolutely!! We can either attract foreign investment as a good buyer, or as an efficient low cost supplier. As buyers, we are still a mild market, but are developing quickly. As suppliers, we have good potential in core manufacturing, but will face great issues because of the Infrastructure, and hence my emphasis on Privatization of Infrastructure.

 

indiamarkets: And so your formula is:

 

Jawad Basith :. Benchmark against the best, globally. Change mindset. Develop infrastructure.

 

indiamarkets: How would you describe your feeling about our future?

 

Jawad Basith : Optimistic! Definitely!