The domestic market is expected to increase from US$65 billion to US$180 billion over the next 5 years
The government has released a 5-year roadmap and vision document for the electronics sector with an aim to grow electronics manufacturing and exports into a $300 billion market by 2026.
The report, which was curated by the Ministry of Electronics and Information Technology (MeitY) and ICEA, provides a year-wise break-up and production projections for the various products that will lead India’s transformation into a US$300 billion electronics manufacturing powerhouse, from the current US$75 billion.
Amongst the key products that are expected to lead India’s growth in electronics manufacturing include mobile phones, IT Hardware (laptops, tablets), Consumer electronics (TV and audio), Industrial electronics, Auto electronics, Electronic components, LED Lighting, Strategic electronics, PCBA, Wearables and hearables, and Telecom equipment.
Mobile manufacturing that is expected to cross US$100 billion annual production – up from the current US$30 billion – is expected to constitute nearly 40 percent of this ambitious growth.
The domestic market is expected to increase from US$65 billion to US$180 billion over the next 5 years. This will make electronics amongst India’s 2-3 top ranking exports by 2026. Of the US$300 billion, exports are expected to increase from the projected US$15 billion in 2021-22 to US$120 billion by 2026.
IT minister Ashwini Vaishnaw said that discussions had taken place with the labour ministry to facilitate the functioning of large factories that can hire 40,000 to 100,000 workers. He added that the government is also taking steps to create basic infrastructure for industrial zones and has identified at least three locations where this can be done. He also asked the industry to help identify more areas where such industrial zones can be created. “Once we create one, I’m sure all other states may compete and will try to create similar zones,” he said.
The five-part strategy to reach the US$300 billion goal, based on an “all of the government” approach, sharply focuses on broadening and deepening electronics manufacturing in India.
This, by building competitiveness and scale by attracting global electronics manufacturers/brands, shifting and developing sub-assemblies and component ecosystem, building a design ecosystem, nurturing Indian champions and steadily removing cost disabilities faced by India.
The Vision Document makes a strong recommendation on the need to focus on aggregate domestic value addition in the electronics sector, as India transforms from its current state to one that is gearing to compete with the likes of China and Vietnam.
The report seeks a competitive tariff structure on electronic components and removal of all regulatory uncertainty to put India on the path to US$300 billion electronics manufacturing. The report recommends a “winner takes all” strategy backed by economies of scale and global competitiveness, new and revised incentive schemes for some sectors, and the need to address issues of sustainability and ease of doing business.