India expects $16.8 bn investment in Electronics Manufacturing

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The jump is mainly backed by the decision of companies like Samsung, LG and Foxconn who are planning to manufacture in India.

According to India Electronics and Semiconductor Association (IESA), the centre has received 156 proposals with investment commitment of Rs 1.14 lakh crore in the last two years. India is also trying to aggressively push for more local manufacturing of defence electronics and avionics as part of its overall indigenisation efforts in defence and aerospace sector.

As per business standard, in order to boost India’s electronics sector,  the government has launched the Modified Special Incentive Package Scheme (M-SIPS) which is a part of the National Policy on Electronics 2012. The scheme has now been extended to July 2020. M-SIPS  aims at boosting India’s electronics sector to $400 billion by July 2020.

India is expected to supercede US and become the second largest market for smartphones by 2016. This will make it worthwhile to manufacture devices locally. Moreover, the government has increased duties on imported handsets. This has worked well in making vendors consider local assembly if not local manufacturing.

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Global electronic contract manufacturers are observing this shift. Taiwan-based smartphone components manufacturer Foxconn, for instance, has committed to invest $5 billion in India over the next five years. The move by Foxconn will not only support just smartphone makers but also other electronics vendors by manufacturing components. Foxconn’s rival Flex, which has a significant presence in India, is manufacturing LED lights, electronic ballasts and GPS tracking devices for India’s domestic market.

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