NITI Aayog releases blueprint to propel India into a USD 500 billion electronics powerhouse by FY 30

NITI Aayog released a report on Friday, titled “Electronics: Powering India’s Participation in Global Value Chains,” providing an analysis of India’s burgeoning electronics sector.

According to a press release, the report emphasises the sector’s potential and the challenges it faces, while outlining specific interventions necessary for India to become a global manufacturing hub for electronics.

Global Value Chains (GVCs) play a crucial role in contemporary manufacturing, involving international cooperation in design, production, marketing, and distribution.

Accounting for 70 per cent of global trade, GVCs underscore India’s urgent need to boost its participation, particularly in sectors like electronics, semiconductors, automobiles, chemicals, and pharmaceuticals. Electronics are especially significant, with 75 per cent of exports linked to GVCs, read the press release.

India’s electronics sector has grown rapidly, reaching USD 155 billion in FY23. Production almost doubled from USD 48 billion in FY17 to USD 101 billion in FY23, primarily driven by mobile phones, which now make up 43 per cent of total electronics production.

The country has vastly reduced its dependence on smartphone imports, now manufacturing 99 per cent domestically.

Initiatives like Make in India and Digital India, along with improved infrastructure and business ease, backed by various incentives, have spurred domestic manufacturing and attracted foreign investment.

Despite these advances, India’s electronics market is relatively small, representing just 4 per cent of the global market. The focus has mainly been on assembly, with limited capabilities in design and component manufacturing.

The global electronics market, worth USD 4.3 trillion, is led by countries such as China, Taiwan, the USA, South Korea, Vietnam, and Malaysia, read the press release.

India currently exports about USD 25 billion annually, less than 1 per cent of the global share despite a 4 per cent share in global demand.

To enhance competitiveness, India needs to localise high-tech components, bolster design capabilities through R&D investments, and form strategic partnerships with global tech leaders.

As of FY23, India’s electronics production is valued at an impressive USD 101 billion, including USD 86 billion in finished goods and USD 15 billion in component manufacturing. (ANI)

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