NEW DELHI: The NITI Aayog has proposed fiscal, financial, regulatory and infrastructure interventions to help scale up local production of electronics, including mobile phones, while stressing on the need to diversify into emerging areas such as wearables, IoT devices and automotive electronics.
In a report titled ‘Electronics: Powering India’s Participation in Global Value Chains’, released on Thursday, the government’s think tank proposed promoting components and capital goods manufacturing, incentivising research and development and design, tariff rationalisation, skilling initiatives, facilitation of technology transfers and infrastructure development to foster a robust electronics manufacturing ecosystem in India and help the country become part of the global value chain.
“India possesses immense potential to establish itself as a global leader in electronics manufacturing,” the report said, adding that by capitalising 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.
According to the Aayog, a conducive business environment and robust policy support, including fiscal incentives and non-fiscal interventions, could help India achieve $500 billion in electronics manufacturing in value terms by 2029-30 — $350 billion from finished goods manufacturing and $150 billion from components manufacturing. “Such growth is projected to create employment for an estimated 5.5 million to 6 million people, significantly boosting job opportunities across the country,” it said, adding that electronics exports are expected to reach $240 billion and domestic value addition to increase to more than 35%. It said India currently exports $25 billion annually, representing less than 1% of the global share despite 4% share in global demand. “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,” the report said. The Aayog said the global value chains (GVCs) are critical in modern manufacturing, involving international collaboration across design, production, marketing and distribution.
They represent 70% of international trade, it said, highlighting India’s urgent need to enhance its participation, especially in electronics, semiconductors, automobiles, chemicals and pharmaceuticals. As per the Aayog, the electronics sector, in particular, is pivotal, with 75% of India’s exports originating from GVCs. The country’s electronics sector stood at $155 billion in 2022-23.
India’s electronics production nearly doubled to $101 billion in 2022-23 from $48 billion in 2016-17, driven primarily by mobile phones, which now constitute 43% of total electronics production.
Source: The Economic Times
IDBI Bank Stake Sale: RBI Vetting Process In Last Leg, Report By Month-End 