'India can make $300-bn electronics by 2026’
According to a vision document released by the Ministry of Electronics and IT (MeitY) in collaboration with the India Cellular & Electronics Association (ICEA), India is likely to achieve electronics production of $300 billion by 2026, down from the target of $400 billion set by the National Policy on Electronics (NPE) 2019 of $400 billion by 2025.
Even though COVID-19-related disruptions hampered the growth trajectory in 2020-21, electronics manufacturing grew from $37.1 billion in 2015-16 to $67.3 billion in 2020-21.
Reasons for the dip in Target
- Lack of adequate infrastructure to scale up quality production
- Lack of skilled manpower for efficient const management and boost production
- Lack of required raw material and Indo-China trade restrictions
- Inadequate tariff regulations and incentives to boost investment,
- Free trade agreements with countries does not incentivise local production
- Lack of global competitiveness of Indian electronic goods
- Lesser demand in local market
Suggestive Measures to boost Electronic Manufacturing Sector in India:
- Primary focus must be on building of scale through incentives and removal of cost disabilities.
- Quick Policy Reforms including stability in import tariffs, decrease in import tariffs for components with no manufacturing base in India, development of skill sets, Promoting R&D and Innovations in core electronics and other sub-sectors and encouraging major foreign manufacturers to set up components ecosystems in India.
- Policy reforms to boost share of Indian electronic goods in global market.
- Labour law reforms like allowing housing on campus and increasing employment opportunities and employability for both domestic and foreign workers
National Policy on Electronics, 2019
- Aimed to make India a global hub for Electronics System Design and Manufacturing – (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.
Salient Features of the Policy:
- Create eco-system for globally competitive ESDM sector: Promoting domestic manufacturing and export in the entire value-chain of ESDM.
- Provide incentives and support for manufacturing of core electronic components.
- Provide special package of incentives for mega projects which are extremely high-tech and entail huge investments, such as semiconductor facilities display fabrication, etc.
- Formulate suitable schemes and incentive mechanisms to encourage new units and expansion of existing units.
- Promote Industry-led R&D and innovation in all sub-sectors of electronics, including grass root level innovations and early stage Start-ups in emerging technology areas such as 5G, loT/ Sensors, Artificial Intelligence (Al), Machine Learning, Virtual Reality (VR), Drones, Robotics, Additive Manufacturing, Photonics, Nano-based devices, etc.
- Provide incentives and support for significantly enhancing availability of skilled manpower, including re-skilling.
- Special thrust on Fabless Chip Design Industry, Medical Electronic Devices Industry, Automotive Electronics Industry and Power Electronics for Mobility and Strategic Electronics Industry.
- Create Sovereign Patent Fund (SPF) to promote the development and acquisition of IPs in ESDM sector.
- Promote trusted electronics value chain initiatives to improve national cyber security profile.