The Minister of State for Electronics & Information Technology recently unveiled a report titled ‘Globalise to Localise: Exporting at Scale and Deepening the Ecosystem are Vital to Higher Domestic Value Addition’. It sets the ambitious aim of reaching a USD 300 billion target in electronic production by 2026. A partnership between the India Council for Research on International Economic Relations (ICRIER) and the India Cellular and Electronics Association (ICEA) led to the report’s creation. Their findings present a comprehensive roadmap for how India can rise as a leading player in global electronics manufacturing.
About the Report
ICRIER and ICEA collaborated on this report, aiming to explore viable strategies to meet a USD 300 billion electronics production goal and achieve exports worth USD 120 billion by 2025-26. The researchers scrutinized successful exporting nations and their domestic value addition percentages. They underlined the necessity of bolstering the domestic manufacturing ecosystem, which will allow India to handle supply chain disruptions effectively and establish itself as a trustworthy partner in global value chains.
The Current State of Electronics Exports
India witnessed its electronics exports surpass USD 16 billion during the 2021-22 financial year. In 2022, the electronics sector has surged to become the country’s 6th largest export. Mobile phones represent the most significant portion of these exports, projected to contribute nearly 50% of the total electronics shipments by the next year.
Changes and Opportunities Post Covid-19
The global value chains of electronics have undergone considerable shifts with tectonic changes following the Covid-19 pandemic. Uncertain government policies in China and the ongoing US-China conflict have prompted numerous manufacturing firms to seek operations beyond China. This transition opens opportunities for India to seize emerging supply chains and elevate its position in electronics manufacturing through aggressive export strategies. Rising exports could build a network effect, stimulating supply chain interests and investments which would subsequently raise the value added to the Indian electronics segment.
Recommendations from the Report
The report discerned the ‘globalize, then localize’ mantra adopted by countries like China and Vietnam as a successful approach. These nations initially achieved a dominant position in global exports before increasing their focus on local content utilization. The study therefore advises India to adopt a similar step-by-step method to align its export trajectory with these successful nations. Several policy measures are required to deepen India’s broader electronics ecosystem, such as the Gati Shakti and Production Linked Incentives (PLI) initiatives. There is an urgent call for India to develop a competitive domestic ancillary supplier ecosystem through technology upgrading programs, sourcing fairs and supportive industry development programs.
Other Manufacturing-Related Schemes
Several other initiatives further support manufacturing within this sector. These include the Scheme for Promotion of Manufacturing of Electronic, Components and Semiconductors (SPECS), Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme and Design Linked Incentive (DLI) Scheme.
About ICRIER
Established in 1981, ICRIER is an independent economic policy research institution. It strives to support Indian policymakers in making informed decisions by offering rigorous analytical research, unbiased policy advice and extensive networking events.
About ICEA
As the top-tier body for the mobile and electronics industry, ICEA encompasses manufacturers, brand owners, technology providers, VAS application & solution providers, distributors, and retail chains of mobile handsets and electronics. ICEA aims to build and cement gains in Indian manufacturing and design in various sectors besides mobile handsets. They work closely with multiple government ministries to enhance industry competitiveness and growth. Their mission is to create a robust, legal, and ethical electronics industry and foster an innovative market environment in India.
