Due to government policy, India's electronics and component production values are expected to grow fivefold by the end of the decade. However, challenges remain as India still relies heavily on imports from other manufacturing powerhouses.
According to CNBC-TV18, IANS, and the Hindustan Times, a new report by the Confederation of Indian Industry (CII) projects that India's demand for electronic components and sub-assemblies will surge from an estimated US$45.5 billion, supporting US$102 billion in electronics production in 2023, to US$240 billion by 2030, supporting an estimated US$500 billion in electronics production.
CII defined printed circuit board assemblies (PCBAs), lithium-ion batteries, camera modules, mechanical enclosures, and displays as priority components and sub-assemblies. The five priority components and sub-assemblies accounted for 43% of India's component demand in 2022. Among them, the production value of PCBAs is anticipated to reach US$139 billion by 2030, growing at a compound annual growth rate (CAGR) of 30%.
CII cautions that India heavily relies on imports for these critical components due to several challenges. These include higher manufacturing costs compared to countries like China, Vietnam, and Mexico, the absence of large domestic manufacturers, an underdeveloped design ecosystem, and shortages in raw materials.
The report suggests that addressing these challenges through targeted policy interventions could transform India's electronics manufacturing landscape.
Recommendations include fiscal support schemes providing 6-8% support for 6-8 years, introducing SPECS 2.0 with subsidies ranging from 25-40% for both brownfield and greenfield projects, rationalizing import tariffs on priority components to 5% or lower, and establishing free trade agreements with regions such as the EU, UK, GCC, and African nations. These measures aim to reduce import dependency and boost domestic manufacturing capabilities.
Implementing these policy recommendations could create approximately 280,000 jobs by 2026, significantly boost the GDP, and position India as a global electronics manufacturing hub. This transformation would enhance India's economic resilience, competitiveness in the global market, and integration into global value chains (GVCs).
