Mobile and electronics industry companies said the new government should prioritize establishing a robust predictable policy framework that incentivizes domestic manufacturing, attracts global investments, and scales up India’s electronics manufacturing sector to integrate with the global value chains (GVCs).
“For India to become a key player in the global value chain (GVC) in the electronics sector, we need a mission-mode approach, with clear goals and timelines to quadruple the sector's output in the next five years. This ambitious target will require coordinated efforts across multiple ministries and continuous engagement with industry leaders,” said Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association (ICEA).
ICEA, which represents Apple, Foxconn, Dixon, Xiaomi, Oppo, Vivo and other mobile handset makers and electronics manufacturers, said that the focus of the new government should be to build Indian Champion companies.
Mohindroo said that a predictable regulatory environment ensuring ease of doing business is essential to foster innovation and growth in the electronics sector. “Our focus should be on creating a robust policy framework that incentivizes domestic manufacturing and attracts global investments. The new administration needs to undertake comprehensive reforms to make India more competitive with countries like Vietnam and China to boost our manufacturing and export capabilities.”
Mohindroo said the new government must prioritize scaling up India's electronics manufacturing sector to align with GVCs, fostering an environment where India is seen as a key player in the global market. This involves enhancing the country's competitiveness by improving infrastructure, streamlining regulatory processes, and attracting foreign direct investment.
“Ensuring sustainable growth and employment opportunities requires a collaborative approach between industry stakeholders and policymakers. GVC’s have to be the highest priority since 90% of the global trade in electronics is with them. We have to make our nation the best location to do business for GVC’s,” he said.
The introduction of virtual GVC trade clusters can streamline our manufacturing processes, attract more investments, and enhance our export potential,” he added.
“An appropriate PLI for components and sub-assemblies as well as wearables and hearables will drive domestic value addition and attract new investments. The new administration needs to undertake comprehensive reforms to make India more competitive with countries like Vietnam and China to boost our manufacturing and export capabilities,” Mohindroo said.
India currently accounts for only 3-4 percent of global electronics manufacturing, despite having a large domestic market.
Over the past decade, electronic components manufacturing in India grew at 13 percent CAGR, trailing the overall electronic manufacturing industry growth of 19 percent CAGR.
The Indian electronics manufacturing industry witnessed a massive four-fold increase from $25 billion in FY13 to $100 billion in FY23, driven by the aim to reduce dependence on imports of finished goods. This translated to 19 percent CAGR over the past decade, equivalent to 78 percent of the Indian electronics market.
The government of India (GOI) has also set an ambitious target for the industry, reaching $300 billion by FY26.
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