{"id":39235,"date":"2025-03-17T18:26:51","date_gmt":"2025-03-17T12:56:51","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=39235"},"modified":"2025-03-17T19:48:43","modified_gmt":"2025-03-17T14:18:43","slug":"india-electronics-manufacturing-and-export-market","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/17-03-2025\/india-electronics-manufacturing-and-export-market","title":{"rendered":"India&#8217;s Electronics Manufacturing and Export Market"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The IT Ministry has launched a Rs 23,000 crore incentive policy over six years to enhance domestic electronic components manufacturing.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About\u00a0<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India aims to boost domestic value addition in smartphone manufacturing from <strong>15-20% to 30-40% <\/strong>by promoting local production of key electronic components.<\/li>\n\n\n\n<li><strong>Key Features <\/strong>of the policy to boost production is as;\n<ul class=\"wp-block-list\">\n<li><strong>Offers incentives in three forms:<\/strong> based on operational expenses (net incremental sales), capital expenses (eligible investments), or a combination of both.<\/li>\n\n\n\n<li><strong>Targets the manufacturing of critical components <\/strong>like display modules, camera modules, PCBAs, lithium cell enclosures, resistors, capacitors, and ferrites.<\/li>\n\n\n\n<li><strong>Annual incentives<\/strong> ranging between <strong>Rs 2,300 crore and Rs 4,200 crore.<\/strong><\/li>\n\n\n\n<li>Open to both <strong>greenfield (new) and brownfield (existing)<\/strong> investments.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Global Scenario of Electronics sector\u00a0<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The global electronics market is estimated at <strong>US$ 4.3 trillion.&nbsp;<\/strong><\/li>\n\n\n\n<li>The electronics GVC is intricate, with a select group of nations like <strong>China, Taiwan, the USA, South Korea, Vietnam, Japan, Mexico, and Malaysia.<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>China <\/strong>is the world&#8217;s largest electronics producer, accounting for nearly <strong>60%<\/strong> of worldwide electronics production.&nbsp;<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>India&#8217;s electronics sector<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India\u2019s electronics sector reached <strong>USD 155 billion in FY23.&nbsp;<\/strong><\/li>\n\n\n\n<li>The electronics production nearly doubled from <strong>USD 48 billion in FY17<\/strong> to <strong>USD 101 billion in FY23, <\/strong>driven primarily by mobile phones which constitute <strong>43%<\/strong> of total electronics production.\n<ul class=\"wp-block-list\">\n<li>This comprises <strong>USD 86 billion<\/strong> in finished goods production and <strong>USD 15 billion<\/strong> in components manufacturing.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The country&#8217;s electronics export is expected to reach <strong>$120 Bn by FY26.<\/strong><\/li>\n\n\n\n<li>During May 2024, electronic goods exports were recorded at <strong>$2.97 Bn<\/strong> as compared to<strong> $2.41 Bn<\/strong> during May 2023, registering a growth of <strong>22.97%.<\/strong><\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"e6e9f0\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"733\" height=\"377\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/03\/india-electronic-goods-exports-and-production-by-value.png\" alt=\"india electronic goods exports and production by value\" class=\"not-transparent wp-image-39236\" style=\"--dominant-color: #e6e9f0; width:517px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/03\/india-electronic-goods-exports-and-production-by-value.png 733w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/03\/india-electronic-goods-exports-and-production-by-value-300x154.png 300w\" sizes=\"auto, (max-width: 733px) 100vw, 733px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Government initiatives<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Make in India, Digital India, and Startup India<\/strong> for promoting domestic manufacturing and technological innovation.<\/li>\n\n\n\n<li><strong>Production Linked Incentive Scheme (PLI):<\/strong> The scheme aims to attract large investments in the mobile phone manufacturing and specified electronic components, including <strong>Assembly, Testing, Marking and Packaging (ATMP) units.<\/strong><\/li>\n\n\n\n<li><strong>National Policy on Electronics 2019 (NPE 2019)<\/strong> It is a comprehensive framework to develop India as a global hub for electronics manufacturing.<\/li>\n\n\n\n<li><strong>Modified Electronics Manufacturing Clusters (EMC 2.0)<\/strong> develops infrastructure with common amenities and industrial clusters for electronics production.<\/li>\n\n\n\n<li><strong>In India 100% FDI<\/strong> is allowed under the automatic route. In the case of defense electronics, FDI up to 49% is allowed through automatic route and beyond 49% requires government approval.<\/li>\n\n\n\n<li><strong>Scheme for setting up of Semiconductor Fabs in India <\/strong>provides fiscal support to eligible applicants for setting up of Semiconductor Fabs which is aimed at attracting large investments for setting up semiconductor wafer fabrication facilities in the country.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges in electronics sector&nbsp;<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Market Competition: <\/strong>The global electronics market is dominated by countries like <strong>China, Taiwan, USA, South Korea, Vietnam<\/strong> and <strong>Malaysia.&nbsp;<\/strong>\n<ul class=\"wp-block-list\">\n<li>India currently exports approximately <strong>USD 25 billion<\/strong> annually, representing less than <strong>1% <\/strong>of the global share.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>High Investment-to-Turnover Ratio:<\/strong> Unlike finished products like smartphones (where \u20b91 investment generates \u20b920 revenue), component manufacturing yields only \u20b92-4 per rupee invested.<\/li>\n\n\n\n<li><strong>Technical Skills: <\/strong>There is a lack of adequately trained technical personnel for advanced manufacturing processes.<\/li>\n\n\n\n<li><strong>Capital Intensive industry:<\/strong> Electronic manufacturing is a complex and technology-intensive sector with huge capital investments, high risk, long gestation and payback periods, requiring significant and sustained investments.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India has set a target to achieve <strong>500 billion USD<\/strong> in electronics manufacturing in value terms by<strong> 2030.<\/strong><\/li>\n\n\n\n<li>To enhance competitiveness, India needs to localize high-tech components, <strong>strengthen design capabilities through R&amp;D investments<\/strong>, and forge strategic partnerships with global technology leaders.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/economy\/in-it-policy-pipeline-rs-23k-crore-electronic-subsidy-scheme-for-value-add-and-jobs-9889778\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The IT Ministry has launched a Rs 23,000 crore incentive policy over six years to enhance domestic electronic components manufacturing.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-39235","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/39235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=39235"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/39235\/revisions"}],"predecessor-version":[{"id":39253,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/39235\/revisions\/39253"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=39235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=39235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=39235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}