The government is working on finalizing a long-term roadmap with the right incentive structure to attract more global supply chains to relocate to India.
The exports and domestic manufacturing of smartphones, consumer electronics, IT and telecom has increased with the PLI schemes. Similarly, the government is planning on PLI schemes for electronics components to narrow down the trade deficit.
Most of the component manufacturers competing with India are located in countries like China, Vietnam, and Thailand. While these countries have a trade surplus, our trade deficit in electronics hit USD 56 Billion in FY22.
The officials and industry executives said that the current PLI schemes for smartphones have increased the domestic manufacturing, which in turn increased the export. However, the components required for these smartphones are largely imported from other countries, increasing the need for PLI schemes for electronics components.
The imports for electronics components hit a 67% surge to USD 25.6 billion in FY22. Similarly, the imports of computer hardware and peripherals jumped 45.4%. The import of consumer electronics climbed 27.7%, while those of telecom and electronic instruments increased 2.3% and 21.4%.
The exports for electronics in the telecom instrument segment increased 66% to USD 7.4 billion, which is nearly half the country’s electronics overall supplies previous fiscal. The exports of consumer electronics jumped 33% to USD 0.9 billion while the electronics components and instruments increased 33% and 17.5% respectively. The computer hardware and peripherals exports increased 32% to USD 415 million last fiscal.
“The only way to check the trade deficit in electronics is to increase domestic value addition and that can happen when more and more components start getting manufactured domestically. This can only happen if a suitable PLI scheme with the right incentives is put in place,” industry executives.