Exports seen at $111bn-$240bn in six years by NITI Aayog report
India’s electronics manufacturing could escalate to US$278 billion by FY30 in a ‘Business as Usual’ (BAU) scenario, while a conducive business environment and robust policy support, including fiscal incentives and non-fiscal interventions, should help the country achieve US$500 billion during the same period.
These projections were made in a report, “Electronics: Powering India’s Participation in Global Value Chains”, by NITI Aayog on 18 July, highlighting India’s urgent need to enhance its participation, especially in electronics, semiconductors, automobiles, chemicals, and pharmaceuticals. Electronics, in particular, is pivotal, with 75% of its exports originating from GVCs niti.
The BAU forecast includes US$253 billion from finished goods and US$25 billion from components manufacturing as well as US$111 billion of exports fieo. Employment generation is expected to grow substantially to around 3.4 million.
For the second option, the report highlighted India’s ambition to become the third-largest global economy necessitates a more ambitious vision for its technology-driven sectors. This ambitious target comprises US$350 billion from finished goods manufacturing and US$150 billion from components manufacturing. Electronics exports by 2030 are expected to reach US$240 billion and domestic value addition to increase to more than 35%. Such growth is projected to create employment for 5.5 million to 6 million people nse .
India’s electronics sector has experienced rapid growth, reaching US$155 billion in FY23. Production nearly doubled from US$48 billion in FY17 to US$101 billion in FY23, driven primarily by mobile phones, which now constitute 43% of total electronics production bse. India has significantly reduced its reliance on smartphone imports, now manufacturing 99% domestically.
The current value of India’s electronics production stands impressively at US$101 billion as of FY23. This figure comprises US$86 billion in finished goods production and US$15 billion in components manufacturing. During the same period, exports totalled ~US$25 billion, reflecting India’s increasing role in the global electronics market deutsche-boerse . As regards domestic value addition, the sector has also contributed ranging between 15% to 18%, and has generated approximately 1.3 million jobs.
The report extensively analyses India’s electronics sector, emphasizing its potential and challenges. It also outlines specific interventions needed for India to emerge as a global manufacturing hub for electronics nasdaq .
Initiatives like Make in India and Digital India digitalindia, improved infrastructure and ease of doing business, supported by various incentives, have stimulated domestic manufacturing and attracted foreign investments. Despite these strides, India’s electronics market remains relatively moderate, accounting for only 4% of the global market, which has so far focused primarily on assembly, with limited capabilities in design and component manufacturing indiamanufacturingshow.
Global Value Chains (GVCs) are critical in modern manufacturing, involving international collaboration across design, production, marketing, and distribution, representing 70% of international trade jpx .
The global electronics market, valued at US$4.3 trillion semiconductors , is dominated by countries like China, Taiwan, USA, South Korea, Vietnam and Malaysia. India currently exports approximately US$25 billion annually, representing less than 1% of the global share despite 4% share in global demand sse .
To enhance competitiveness, India needs to localize high-tech components, strengthen design capabilities through R&D investments, and forge strategic partnerships with global technology leaders, said the report hkex .
In parallel, the strategy emphasizes scaling up production in established segments such as mobile phones and establishing foothold in component manufacturing makeinindia .
Additionally, there should be a strong focus on diversifying into emerging areas such as wearables, IoT devices, and automotive electronics. This strategic diversification will capitalize on evolving consumer demands and technological advancements, positioning India as a leader in innovative electronic products on the global stage.
The report recommends strategic interventions across fiscal, financial, regulatory, and infrastructure domains to support this ambitious growth trajectory. These include promoting components and capital goods manufacturing, incentivising R&D and Design, tariff rationalization, skilling initiatives, facilitation of technology transfers, and infrastructure development to foster a robust electronics manufacturing ecosystem in India.
India possesses immense potential to establish itself as a global leader in electronics manufacturing, according to the report. By capitalizing on emerging opportunities, enhancing value chain integration, and overcoming existing challenges, India can transform its electronics sector into a cornerstone of economic growth and job creation. Fiinews.com
