New Delhi [India], June 23 (ANI): India needs to take critical actions to transform its electronic sector ecosystem from an ‘import dependent assembly led manufacturing’ to ‘component level value-added manufacturing’, highlights a report by Confederation of Indian Industry.
As per the Report, in 2023, the demand for components and sub-assemblies stood at USD 45.5 billion to support USD 102 billion worth of electronics production. This demand is expected to scale to USD 240 billion to support the USD 500 billion worth electronics production by 2030.
The priority components and sub-assemblies including PCBAs (Printed Circuit Board Assembly), are projected to grow at a robust CAGR (Compounded Annual Growth Rate) of 30 per cent, reaching USD 139 billion by 2030.
The report also recommended the government to take key actions including a scheme to provide fiscal support, SPECS 2.0 (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors) to be introduced, import tariffs on components like camera modules to be rationalized, and sign FTAs with European and African countries.
The Report identifies 5 priority components/sub-assemblies of batteries (lithium-ion), camera modules, mechanicals, displays, and PCBs (Printed Circuit Board) which are categorized as high priority for India. They cumulatively accounted for 43 per cent of the components demand in 2022 and are expected to grow to USD 51.6 billion by 2030.
These components have either nominal production in India or are heavily import-dependent. India can hardly afford to sustain this trend of importing the priority components. Similarly, PCBA is a high potential category for India since most of the demand is met by imports. This segment is expected to grow by 30 per cent, leading to a demand creation of around USD 87.46 billion by 2030.
However, manufacturing-related cost disabilities vis-a-vis other competing economies like China, Vietnam, and Mexico (10-20 per cent), lack of big domestic manufacturing corporations, lack of domestic design ecosystem for Indian companies, and lack of raw materials ecosystem add to the challenges that disable the domestic manufacturing of components and sub-assemblies in India.
According to the report, these policy supports will help in various economic benefits arising from the development of the components and sub-assemblies ecosystem in India. Job creation to the tune of approx. 2.8 lakhs by 2026, increase in domestic value addition from the current levels, reduction in import dependency, and increase in GDP, all leading to firmly positioning India as a global hub for electronics manufacturing. (ANI)
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