With the new electronic components manufacturing policy “in place”, India’s electronic manufacturing will see a value addition of 40 to 50 per cent from the current 15-16 per cent, said a report by Axis Capital.
“We expect value addition to increase to 40/ 50 per cent from the current 15/ 16 per cent, with a components policy now in place”. said the report.
The Ministry of Electronics and Information Technology (MeitY), on April 8, notified the Electronics Components Manufacturing Scheme, marking a significant step towards strengthening India’s position as a global hub for electronics manufacturing.
According to the Axis report, India is the second-largest mobile phone producer in the world, with 99 per cent of mobile phones sold in the country being locally made. India’s mobile phone exports surged by 77 times over FY14-24.
The report highlighted that India is rapidly emerging as a preferred global manufacturing and export hub, driven by a combination of strategic government policies like Production Linked Incentive (PLI), Phased Manufacturing Program (PMP), and Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), a skilled workforce, and infrastructure that is outpacing competitors.
India has always relied significantly on imports, particularly in electronics, where imports exceeded production until the financial year (FY16).
With the ‘Make in India’ initiative, the country is now expanding its electronics industry, attracting significant investments and boosting local output.
As a result, production was around 24 per cent higher than imports in FY24. India’s electronics exports expanded at a CAGR of around 26 per cent over FY16-25.
Electronics production witnessed a CAGR of 20 per cent over FY15-24, led by mobile phone manufacturing. Mobile manufacturing contributed 44 per cent of total electronic production and witnessed a CAGR of 41 per cent over the same period, significantly outpacing the total electronics growth.
The government has set a target to achieve USD 500 billion in exports by FY30, where the focus will be on component manufacturing, which is expected to contribute 30 per cent of the overall production from 9 per cent in FY24.