With the National Democratic Alliance (NDA) government set to return for a third term, industry players are nursing expectations of a further boost to the electronics manufacturing and semiconductor chip sectors in the next 5 years.
“India’s verdict is one for stability and continuity. Policies of the incumbent government have added significant thrust to economic development as well as fast tracked infrastructure development. To my mind, the next five years will prove to be pivotal in the way that India’s position on the world stage evolves and aids in putting the country on the global map as a product nation in areas of electronics, semiconductors, space tech, EVs, drones, medtech, etc. This is our time to develop design and manufacturing capabilities thereby reducing dependence on China," said Ajai Chowdhry, co-founder of HCL.
"The last ten years have ensured Indian companies revitalise themselves; the PM's call for Aatmanirbharta has been met with much appreciation together with on the ground action. It is time now, to transition and add focus on value added manufacturing as well as ‘design in India’ products, thereby positioning India as a creator of global brands. I am sure the government will take decisive steps in taking forward its economic agenda and steer the country to greater heights," he added.
In the previous term, which officially ended on June 5 with Prime Minister Modi tendering his resignation, the government had announced a $10 billion (Rs 76,000 crore) semiconductor package which has been allocated to players like the Tata Group, CG Power, Micron for chip plants.
Top officials have indicated over the past few months that a new package is on the anvil which will focus on supporting end-to-end design and manufacturing of semiconductor chips in the country.
As the outcome of the Lok Sabha polls happened to be closer than expected yesterday (June 4), some quarters felt the jitters as a change in guard at the Centre might have put big bang subsidies for the industry on the backburner.
The return of the NDA government seems to have calmed their nerves — as it has the stock market.
For instance, electronics assembling company Dixon Technologies, which has benefitted from a raft of the Modi government’s policies to promote electronics manufacturing, saw its stock price fall by as much as 12 percent in intra-day trading on result day.
However, as NDA partners re-affirmed their support today, the Dixon stock has reversed some of its value erosion and risen by more than 6 percent. The company is already assembling phones for brands like Xiaomi, and is reportedly in talks to partner with Google for Pixel phones.
"The results were slightly surprising, but there will be no impact on manufacturing in the electronics industry… There is a national consensus that the impact of this industry on the economy is huge. We expect PLI schemes to continue to play their part to help various segments within the industry,” a top executive at a leading electronics manufacturing services (EMS) company told Moneycontrol.
The Modi government has set an ambitious goal of producing $300 billion in electronics products by 2025-26, offering generous incentives through its production-linked incentive (PLI) schemes to attract device makers seeking to diversify their manufacturing capabilities beyond China.
“Over the past five years, the administration has implemented economic reforms fostering growth, particularly in the semiconductor and electronics sectors. We anticipate this trend will continue, contributing to the VIKSIT Bharat vision and making India a developed nation by 2047,” Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), said.
Over the past year, Apple has been aggressively ramping up local production of its flagship iPhone devices in India. The Cupertino-based tech giant reportedly plans to increase production in India to over $40 billion in the next 4-5 years, after crossing the $7-billion production mark in the last fiscal.
"This is an industry where it's very important to create a critical mass. We have crossed that threshold now with $100 billion of electronics production and $44 billion of mobile phones. Today, we are in a position where we can move away from the import-substitution model and move on to an export-led model,” Ashwini Vaishnaw, who has led the ministry of electronics and information technology since 2021, said last year.
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