(MENAFN- Live Mint) New Delhi: The Niti Aayog on Thursday recommended fiscal incentives and import tariff reduction on electronic components saying this would help the domestic Electronics industry grow five-fold from $101 billion in FY23 to $500 billion by 2030.
The federal policy think tank said fiscal and non-fiscal support along with a conducive business environment will help in achieving a $350 billion finished goods production target and another $150 billion in component making.
This level of growth could create jobs for an estimated 5.5-6 million people, significantly boosting job opportunities across the country, NITI Aayog said. Electronics exports are expected to reach $240 billion and domestic value addition to increase to more than 35%, as per this blueprint.
The Niti report said that fiscal incentives could be offered in terms of operational expenditure for scaling up production of components which are less complex, capital expenditure support for setting up production units of complex components and a hybrid of both capital and operational expenditure support for highly complex components which are currently not produced in India.
Import tariff hindrance
The think tank also said that high import tariffs on electronics components which go up to 20% are hindering India's ability to scale up electronics exports and compete globally.
India's import tariffs are higher than those of China, Malaysia and Mexico, which puts Indian electronics exports at a cost disadvantage, Niti Aayog said.
S. Krishnan, secretary in the ministry of electronics and information technology, who attended the launch of the report virtually, said, referring to the recommendations, "We will take it up with the other arms of the government.”
Also read | P.C. Mohanan: Tapping data to define the India story Also read | Mint Explainer: Special category status and what it means for the new government Also read |
Farm growth high; good rains may ease rural jobs pressure: Ramesh Chand
Krishnan explained that value addition in the electronics sector, which at present is around 18-20%, needs to double. Producing components is crucial for this. Krishnan also said that boosting domestic production of electronic goods was also a matter of making available quality products for Indian consumers at an affordable price.
China, Taiwan dominate
At present, the $4.3 trillion global electronics market is dominated by China, Taiwan, the US, South Korea, Vietnam and Malaysia. Indian exports account for $25 billion a year, representing less than 1% of the global share despite having 4% share in global demand.
“To enhance competitiveness, India needs to localize high-tech components, strengthen design capabilities through research and development investments and forge strategic partnerships with global technology leaders,” Niti Aayog said in a statement.
Pankaj Mohindroo, Chairman of India Cellular & Electronics Association (ICEA) said that India integrating into the global value chain is essential for building a large-scale and globally competitive electronics manufacturing industry.“The true growth potential lies in the global market. Global value chains not only drive large-scale job creation but also build technology capabilities within the domestic industry,” said Mohindroo. He said that global value chains aid in driving the scale of production, reducing costs, and in enhancing competitiveness.
The Niti Aayog report also recommended fiscal incentives for product designing and for scaling up industrial infrastructure for electronics production.
Gulveen Aulakh contributed to this story.
MENAFN18072024007365015876ID1108456750
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.