India Unveils $5 Billion Plan To Strengthen Domestic Electronics Component Production

(MENAFN- Live Mint) India is set to roll out incentives worth up to $5 billion to local electronics firms to manufacture components for devices ranging from smartphones to laptops, according to government officials (via Reuters).

Reportedly, the initiative aims to reduce reliance on Chinese imports and strengthen domestic supply chains within the fast-growing sector.

The country's electronics production has surged to $115 billion in 2024, more than double its output six years ago, driven by global manufacturers like Apple and Samsung. India has now emerged as the fourth-largest smartphone supplier globally.

However, the industry remains heavily dependent on imported components, particularly from China and Hong Kong, which account for over half of India's $89.8 billion electronics imports in the fiscal year 2024, according to the Global Trade Research Initiative (GTRI).

The forthcoming scheme, spearheaded by India's Ministry of Electronics , will provide incentives for manufacturing critical components such as printed circuit boards. These measures aim to enhance domestic value addition and foster deeper local supply chains, officials stated, requesting anonymity as details remain confidential. The programme is expected to be unveiled within the next two to three months, pending approval by the Ministry of Finance.

India's ambitions in electronics manufacturing are significant, with a target to scale up production to $500 billion by the fiscal year 2030, including $150 billion in component manufacturing, as outlined by the government think tank Niti Aayog.

Also Read | Finance Ministry revises norms for dividend payments, share buybacks for PSUs

"This scheme is timely as it will encourage component production, enabling India to achieve global-scale electronics manufacturing," remarked Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association.

The move is seen as pivotal in advancing India's goal of becoming a global electronics manufacturing hub while reducing import dependency. Neither the Ministry of Electronics nor the Ministry of Finance has commented on the matter yet.

This initiative highlights India's efforts to position itself as a major player in the global electronics market amid growing geopolitical and economic shifts.

(With inputs from Reuters)

MENAFN22112024007365015876ID1108914396