MeitY has released a five-year roadmap for the electronics sector, the second volume in India's Vision Document for its transformation into a $300 billion electronics manufacturing powerhouse.
The Ministry of Electronics and Information Technology (MeitY), in association with ICEA, released a five-year roadmap and vision document for the electronics sector, titled $300 bn Sustainable Electronics Manufacturing & Exports by 2026.
This roadmap is the second volume of a two-part Vision Document—the first of which, titled Increasing India’s Electronics Exports and Share in GVCs, was released in November 2021.
This report provides a year-wise break-up and production projections for the various products that will lead India’s transformation into a $300 billion electronics manufacturing powerhouse, from the current $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, automotive electronics, electronic components, LED lighting, strategic electronics, PCBA, wearables and hearables, and telecom equipment (see chart). Mobile manufacturing that is expected to cross $100 billion annual production—up from the current $30 billion—is expected to constitute nearly 40% of this ambitious growth.
Shri Ashwini Vaishnaw, Union Minister of Electronics & Information Technology, congratulated and lauded the entire team of Ministry of Electronics & Information Technology for their efforts in bringing out the documents and policy framework items at this remarkable speed. During the event, Shri Vaishnaw also addressed some points raised by industry leaders during the recent interaction with him. Addressing industry’s apprehensions over the issue of dual regulations in mobile manufacturing, the Minister clarified that telecom department is not going to enter into mobile manufacturing and the mobile manufacturing regulatory regime will remain same.
Speaking on the occasion, Shri Rajeev Chandrasekhar, Minister of State, Electronics & IT and Skill Development & Entrepreneurship, said that Ministry is focusing on broadening and deepening of electronics industry in India in line with Prime Minister’s recent statement at World Economic Forum, where he said that India is emerging as a reliable and trusted partner in value chains.
Talking about the objective of Volume 2 of the vision document, Shri Rajeev Chandrasekhar, said, “New markets, new customers and being a player in Global Value Chain (GVC) is the goal and mission of the 2nd phase. This volume along with the 1st Volume on electronics manufacturing, represent an excellent example of goal setting, detailed strategy making after hours of deep engagement between government and industry. He further added that the numbers in the 2nd Volume of vision document confirms that there is a real opportunity in electronics sector, driven by 2 factors: growth of digital consumption and growth and diversification of global value chains.
The domestic market is expected to increase from $65 billion to $180 billion over the next five years. This will make electronics among India’s 2-3 top ranking exports by 2026. Of the $300 billion, exports are expected to increase from the projected $15 billion in 2021-22 to $120 billion by 2026.
The five-part strategy to reach the $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 $300 billion electronics manufacturing comes on the back of $10 billion PLI Scheme announced by the government to propel forward the Semiconductor and Display ecosystem. The government has committed nearly $17 billion over the next six years across four PLI Schemes – Semiconductor and Design, Smartphones, IT Hardware and Components. 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. It also details the importance of the key role Indian champions will play in addition to global companies – both of whom are already part of the PLI Schemes.
The report seeks a competitive tariff structure on electronic components and removal of all regulatory uncertainty to put India on the path to $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.
Chart: Roadmap to manufacture US$300 billion Electronic Products
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