Vision Document on Electronic Manufacturing: Relevance
- GS 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Vision Document on Electronic Manufacturing: Context
- Recently, Ministry of Electronics & IT, in association with ICEA released a 5-year roadmap and Vision Document for the electronics sector, titled “$300 bn Sustainable Electronics Manufacturing & Exports by 2026.
Vision Document on Electronic Manufacturing: Key points
- This roadmap is the second volume of a two-part Vision Document – the first of which titled “Increasing India’s Electronics Exports and Share in GVCs” was released in November 2021.
- This report provides a year-wise break-up and production projections for the various products that will lead India’s transformation into a US$300 billion electronics manufacturing powerhouse, from the current US$75 billion.
- Key products that are expected to lead India’s growth in electronics manufacturing: Mobile Phones, IT Hardware (laptops, tablets), Consumer electronics (TV and audio), Industrial electronics, Auto electronics, Electronic components, LED Lighting, Strategic electronics, PCBA, Wearables and hearables, and Telecom equipment.
- Mobile manufacturing that is expected to cross US$100 billion annual production – up from the current US$30 billion – is expected to constitute nearly 40% of this ambitious growth.
- Goal and mission: New markets, new customers and being a player in Global Value Chain (GVC).
- The opportunity in electronic sector is driven by 2 factors: growth of digital consumption and growth and diversification of global value chains.
Electronic sector: Potential in India
- The domestic market is expected to increase from US$65 billion to US$180 billion over the next 5 years.
- This will make electronics amongst India’s 2-3 top ranking exports by 2026.
- Of the US$300 billion, exports are expected to increase from the projected US$15 billion in 2021-22 to US$120 billion by 2026.
Electronic manufacturing in India: Steps by government
- The five-part strategy to reach the US$300 billion goal, based on an “all of the government” approach, sharply focuses on broadening and deepening electronics manufacturing in India.
- The US$300 billion electronics manufacturing comes on the back of US$10 billion PLI Scheme announced by the government to propel forward the Semiconductor and Display ecosystem.
- The government has committed nearly US$17 billion over the next 6 years across four PLI Schemes – Semiconductor and Design, Smartphones, IT Hardware and Components.
Vision Document on Electronic Manufacturing: Recommendations
- The Vision Document recommends to focus on aggregate domestic value addition in the electronics sector to compete with the likes of China and Vietnam.
- The report seeks a competitive tariff structure on electronic components and removal of all regulatory uncertainty to put India on the path to US$300 billion electronics manufacturing.
- The report recommends a “winner takes all” strategy backed by economies of scale and global competitiveness, new and revised incentive schemes for some sectors, and the need to address issues of sustainability and ease of doing business.