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Electronics Industry Wants The Government To Bring Out Separate Incentive For PCB Manufacturing In India

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  • India has the potential to become a $100 billion global manufacturing and export hub for printed circuit board assembly (PCBA) by 2026 as per a report by India Cellular & Electronics Association (ICEA) and EY
  • ICEA’s report stated that PCBs constitute about 40 per cent of the bill of materials (BoM) cost of electronic products, and present a $600 billion market globally

The electronics manufacturing industry has asked the government to roll out a separate incentive scheme for printed circuit board assembly (PCBA). It presents a $109 billion export opportunity for India in the next five years.

Pankaj Mohindroo, chairman of the India Cellular and Electronics Association told reporters in a virtual conference that the industry is seeking a separate production-linked incentive (PLI) scheme for PCBAs. He added that RoDTEP (Remission of Duties or Taxes on Export Products) should get instituted on PCBs and that is already in progress and the ball is in the government’s court now.

RodTEP (Remission of Duties or Taxes on Export Products) scheme will replace MEIS (Merchandise Exports from India) Scheme with effect from 1 January 2021.

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Cumulative PCBA export for India can be about $109 billion

As per the joint report released by ICEA and consulting firm EY, if support of six per cent on exports of PCBAs can be provided, by 2025-26, the cumulative PCBA export for India can be about $109 billion. If no support is offered, the export is estimated to dwindle to a $ 4 billion.

The report added that the government must also remove cost disadvantages for PCBA manufacturing in India, allow import of used machinery, ensure uninterrupted power supply and allow priority clearance of imported raw material. PCBs are imported from China while components are mounted in the country.

Rise in domestic manufacturing of mobile phones

Mohindroo added that PCB manufacturing for mobile phones in India has grown from about ₹3,000 crore-4,000 crore in 2015-16 to ₹90,000 crore, due to the rise in domestic manufacturing of mobile phones, which is mostly meant for the Indian market. China has already built large capacities of PCB manufacturing, which allows the country to undercut Indian manufacturers, even with lowered import duties for PCBs in India. So, manufacturing PCBs in India will help companies cut costs.

ICEA’s report stated that PCBs constitute about 40 per cent of the bill of materials (BoM) cost of electronic products, and present a $600 billion market globally. They are required for growing product segments like mobile phones, tablets, notebooks and desktop PCs, smart TVs, audio devices and more. Mohindroo said that as PCBs start getting manufactured here, and other components are manufactured here too, it will unleash a virtuous cycle of development of that entire industry.

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