In its report, the Confederation of Indian Industry (CII) suggested that India needs to shift the electronic sector from assembly-led to component-level manufacturing.
Electronics manufacturing and demand in India is projected to increase from USD 102 billion in 2023 to USD 500 billion by 2030, indicating strong confidence from domestic and international manufacturers and investors, claimed CII in their recent report.
The report anticipates that key components and sub-assemblies, such as PCBAs, will experience significant growth, with a strong compound annual growth rate (CAGR) of 30%, reaching USD 139 billion by 2030.
The electronics sector in India offers substantial value-addition opportunities, ranging from 10% to 50% across different component types. This highlights the urgent need to shift from assembly-focused to value-added manufacturing at the component level. Integrating with Global Value Chains (GVCs) is crucial to meeting global demand with scalable, quality-driven electronic solutions.
The report issued recommendations for the government to scale up assembly activities to strengthen India’s domestic component ecosystem. It suggested enhancing local value addition and boosting exports through supportive policies.
The government must implement SPECS 2.0 with 25% to 40% subsidies, prioritising components with lower capital turnover to spur investments.
It’s crucial to align import tariffs for critical sub-assemblies and components, targeting under 5%. Additionally, fostering open investments, imports, and technology transfers, along with updating regulations like Press Note 3 to meet current manufacturing demands, is imperative.
The report further emphasised promoting global investment via government-to-government initiatives. It also advocated fostering public-private partnerships in government institutions to aid smaller enterprises and facilitate collaborations with MSMEs.
Additionally, offering concessional land and Plug & Play infrastructure to streamline setup procedures at the state level is essential.
CII highlighted five critical components/sub-assemblies deemed essential for India: lithium-ion batteries, camera modules, mechanicals (enclosures, etc.), displays, and PCBs. Together, they accounted for 43% of component demand in 2022 and are projected to reach USD 51.6 billion by 2030.
These components are either minimally produced in India or heavily reliant on imports. India cannot sustain this reliance on imported priority components.
Similarly, PCBA (Printed Circuit Board Assemblies) presents significant potential, with most demand currently met through imports. This segment is expected to grow by 30%, creating a demand of approximately USD 87.46 billion by 2030.
According to the report, India’s electronics manufacturing has seen a surge in assembly driven by EMS operations in mobile, automotive, industrial, and telecom sectors, heavily reliant on imports due to limited domestic capabilities and significant dependence on China for 62% of electronic components. This poses risks to long-term sustainability and supply chain resilience.
Thus, government policy support will lead to economic benefits from advancing India’s components and sub-assemblies ecosystem. This includes creating around 280,000 jobs by 2026, increasing domestic value addition, reducing dependency on imports, and boosting GDP growth.
These efforts may help India to become a leading global hub for electronics manufacturing, concluded CII.
