While India’s efforts to boost mobile phone and electronics manufacturing in the country have yielded commendable results, the numbers reveal that they have not been enough to cater to the skyrocketing demand for such items.
Over the nine years that Narendra Modi has been in power, the manufacture of electronic goods – including mobile phones and appliances – more than quadrupled to Rs 8.2 lakh crores from Rs 1.9 lakh crore. This translates to average yearly growth of 20%.
However, despite this growth, production has not been able to keep up with surging demand.
Even back in 2014-15, against the production of 1.9 lakh crore, the country consumed double that – or around Rs 3.8 lakh crore – worth of electronic items.
Fast forward to 2022-23, the situation is not much better. While the production did increase to Rs 8.2 lakh crore, demand had grown even further to Rs 12.5 lakh crores – thus landing the country in a situation of having to import nearly a third of its demand from overseas.
And the growth in demand will continue to rise, according to Minister of State for information technology, Rajeev Chandrasekhar, who estimates it to hit Rs 14.9 lakh crores in less than three years.
A similar estimate has been put forth in a report by India Cellular and Electronics Association ICEA.
The report too pegs India’s future demand for electronic goods at $180 bln (around Rs 14.9 lakh crores) by 2025-26. To deal with this and encourage exports, the report set a production target of Rs 24.9 lakh crore by the same year.
Around ten years ago, a report by an industry body warned the Centre to take urgent steps, forecasting that without such steps, India’s electronics import bill could balloon to $300 billion by 2020, making it the single biggest item of import.
Alarmed by such predictions, the Modi government came up with a new scheme called Production Linked Incentive Scheme (PLI). Under this, the government promised to reimburse the manufacturer an amount equivalent to 3% to 6% of the revenue generated from the sales of goods manufactured under this scheme.
In 2020, the government admitted 16 phone makers under this scheme, including Samsung, Foxconn, Rising Star, Wistron and Pegatron for a period of five years.