(MENAFN- KNN India)
New Delhi, Jun 24 (KNN) A recent report by the Confederation of Indian industry (CII) highlights the urgent need for fiscal support and the development of a robust domestic design ecosystem to achieve this ambitious goal.
The report, titled "Developing India as the manufacturing Hub for Electronics Components and Sub-Assemblies," identifies five priority areas for component manufacturing: lithium-ion batteries, camera modules, mechanical enclosures, displays, and printed circuit boards (PCBs).
These components, which currently account for 43 per cent of India's electronics component demand, are projected to grow into a USD 51.6 billion market by 2030.
To address the challenges facing domestic manufacturers, the CII recommends a comprehensive strategy. Firstly, the government should provide a 6-8 per cent fiscal support for select components and sub-assemblies over a 6-8 year period.
This sustained support is crucial for allowing manufacturers to scale up operations and enhance value addition.
Secondly, the CII proposes a revamped version of the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), dubbed SPECS 2.0.
This new iteration would offer subsidy support between 25 per cent to 40 per cent for potential investors, adopting a gradient approach that favours higher-end subsidies to attract more significant investments.
The third recommendation focuses on developing a strong domestic design ecosystem. This is essential for reducing dependency on foreign designs and fostering innovation within India's electronics sector.
Lastly, the CII emphasises the need to address the lack of a domestic raw materials ecosystem, which currently hinders local manufacturing efforts.
The urgency of these measures is underscored by the projected growth in demand for electronic components and sub-assemblies. In 2023, the demand stood at USD 45.5 billion, supporting USD 102 billion worth of electronics production. By 2030, this demand is expected to skyrocket to USD 240 billion, underpinning a USD 500 billion electronics manufacturing sector.
Of particular interest is the printed circuit board assembly (PCBA) segment, which is poised for explosive growth. With an expected 30 per cent growth rate, PCBA demand could reach USD 87.46 billion by 2030, presenting a significant opportunity for domestic manufacturers.
However, India faces stiff competition fr0m established manufacturing hubs like China, Vietnam, and Mexico.
Cost disabilities ranging fr0m 10-20 per cent compared to these countries, coupled with a lack of large domestic manufacturing corporations, pose significant challenges.
As India strives to reduce its reliance on imports and build a self-reliant electronics manufacturing ecosystem, the implementation of these recommendations could prove crucial in realising the nation's ambitions to become a global leader in this sector.
(KNN Bureau)
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