(MENAFN- KNN India)
New Delhi, Sep 13 (KNN)
India's Electronics manufacturing sector is poised for remarkable growth, with projections indicating that the industry could nearly quadruple to USD 450 billion by FY2030, according to a report by Nomura.
This expansion is expected to occur at a compound annual growth rate (CAGR) of 25 per cent over the next six years, signalling a critical moment of transformation for the country's technology industry.
The report attributes this surge to multiple factors, including higher sourcing by global tech giants such as Apple and Samsung, which are expected to source 20-30 per cent of their global needs from India.
Additionally, global IT hardware players like Lenovo, HP, and Dell are anticipated to meet around 20 per cent of their worldwide requirements through Indian manufacturers.
The increasing demand for electronics across various sectors, such as automobiles, railways, telecom, and defence, is also driving growth.
This is further supported by the development of India's component ecosystem, including advancements in displays, printed circuit boards (PCBs), and semiconductors.
India's electronics exports are projected to grow at an even faster pace, with the report forecasting a 35 per cent CAGR, reaching USD 210 billion by FY2030.
Domestic consumption is also expected to rise steadily, with a growth rate of 15 per cent over the same period.
The government's Production Linked Incentive (PLI) schemes, valued at USD 20 billion, play a crucial role in fostering this growth. Over half of the capital allocated under these schemes is dedicated to strengthening the domestic production of semiconductors and other electronic components.
Nomura emphasised the importance of government intervention in nurturing the industry, drawing parallels with how sustained government support in countries like the US, Japan, China, and Taiwan helped develop their tech manufacturing sectors.
The report addressed concerns about the size of these incentives and whether investments would continue after they taper off, asserting that India's approach mirrors those of other successful nations that offered long-term support to their tech industries.
The government's backing is also seen as a key factor in boosting industry confidence and encouraging companies to commit resources for the long term, especially as India's cost-competitive labour enhances its global competitiveness.
Furthermore, India's neutral stance in the ongoing US-China tech rivalry positions it as a favourable partner for both Western and Asian companies.
The report highlighted that domestic manufacturers are likely to benefit from technological collaborations, which will accelerate their growth and innovation in the sector.
In light of these developments, Nomura initiated coverage on key Indian companies, including Dixon Technologies and Kaynes Technology, with buy recommendations.
The firm set target prices of Rs 15,567 for Dixon Technologies and Rs 5,969 for Kaynes Technology, reflecting the potential for significant gains in the coming years.
Overall, the combination of robust government support, rising global demand, and India's expanding technological capabilities has set the stage for the country to emerge as a major hub for electronics manufacturing.
As investments increase and the industry scales up, India's electronics sector is expected to play an increasingly important role in the global supply chain.
(KNN Bureau)
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