The government has set a target of reaching $500 billion worth of electronics production in the country by 2030. According to a report published by Niti Aayog, a $500 billion electronics manufacturing sector would create 5-6 million jobs, and lead to electronics exports totalling $240 billion.
The current value of India’s electronics production stands at an impressive $101 billion as of FY23. This comprises $86 billion in finished goods production and $15 billion in components manufacturing. During the same period, exports totalled $25 billion, reflecting India's increasing role in the global electronics market. The sector currently generates 1.3 million jobs.
In order to achieve this target, the Niti Aayog report suggests that India should be part of the Global Value Chains (GVCs), which the report says are critical in modern manufacturing, involving international collaboration across design, production, marketing and distribution.
“They represent 70% of international trade, highlighting India’s urgent need to enhance its participation, especially in electronics, semiconductors, automobiles, chemicals, and pharmaceuticals. Electronics, in particular, is pivotal, with 75% of its exports originating from GVCs,” says the report titled Electronics: Powering India’s Participation in Global Value Chain.
The report recommends several policy measures to achieve the target of $500 billion electronics manufacturing in the country. These include rationalisation of import duties, GST and income tax. The report also suggests major fiscal incentives -- including opex and capex incentives -- for electronic component makers.
The report also highlights the significance of product designing in electronics manufacturing and stressed on the need for creating design capabilities in the country.
Unveiling the report, Niti Aayog CEO BVR Subrahmanyam said that if we don’t get those design capabilities in India, domestic manufacturers will not get orders because designers decide which component will go into the product.
The report also recommends incentives for large-scale component manufacturing, and design R&D. The Niti Aayog report is also in favour of attracting overseas high-level talent for high precision manufacturing and design, expediting visa approvals for training and setting up of electronics skill training hubs.