India is set to become the next Global Electronics manufacturing hub

It is a very important move in the journey of ‘Make in India’ for electronics. The journey started in 2020 with an aim of attracting large investments in the country that includes manufacturing of electronic components, semiconductors and mobile segments. India’s cabinet has approved a $6.37 billion (Rs 637 crore) plan to boost electronics manufacturing. The policy has set an ambitious target of increasing electronics manufacturing in the country to $400 billion by 2025.

The new measures that come at a time when the world is battling the coronavirus epidemic and halting global supply chains is aimed at attracting large investments in the country that includes manufacturing of electronic components, semiconductors and mobile segments. The Scheme shall extend an incentive of 4% to 6% on incremental sales of goods manufactured in India and covered under target segments, to eligible companies, for a period of five subsequent years.

The move is likely to give an aggressive push to ensure big companies such as Apple, Samsung, Huawei, Oppo and Vivo, besides contract manufacturers like Foxconn and Wistron bring their global supply chains to India and make the country an electronics hub.

With a population nearing 1.4 billion, India has emerged as one of the largest markets for electronics products in the world. While the highest growth is in demand for smartphones, lighting products, security products as well as industrial technologies, there is also significant expansion in markets for medical electronics, defense, and emerging technologies such as 5G, IoT, Industry 4.0, and smart cities.

As per a report, the country’s electronics market is forecast to reach $400 billion by 2025. Secondly, there is a huge gap in supply of electronic components such as PCBs, capacitors, resistors, chip components and semiconductor devices. “The recent disruptions in the global supply chain and challenges posed by the COVID-19 pandemic have further exposed the weakness and gaps in our supply chain.

There is an urgent need to invest a lot more to bridge these gaps and improve our self-reliance. To support the objective, the Government has the full support and initiatives to encourage investments in new electronics manufacturing facilities as well as expansion of existing ones. In addition, there is an Electronic Manufacturing Clusters (EMC) Scheme to develop industrial parks and provide modern manufacturing facilities and a competitive environment to investors.

Deepak Sahu, President & CEO, VARINDIA