| | December, 20218VANTAGE POINTT he electronics industry is one of the fastest-growing industries in India where a major section of the society is handholding smartphones or tablets, or they are delved into working in laptops, which are connected to routers for internet connection. Electronics at home include televisions, printers, washing machines and air-conditioners. Because of this, the total electronics consumption market in India in recent times in 2019 was around $160 billion according to IESA report. 50 percent of the products are imported and 50 percent of the products are produced domestically. However, the 50 percent domestic manufacturing value add was only 15-20 percent , which is a very big challenge.ELECTRONICS MANUFACTURINGAnalyzing the value chain of any electronic product suggests that 40 percent value is in to components of PCB which are semiconductors, passives , connectors, display and battery. Now, there is hardly any component manufacturing ecosystem existing. So, we are importing more than 80 percent components as we don't have domestic manufacturing of these components, missing out on 40 percent value.Next big value is into IP and Technology design. We are doing very well as design services for the world or in captive design centers of the global company however IP value does not get recognized for India. There are very few product companies that are designing and manufacturing electronics products from India. So, many times again, we miss out on the value of IP technology by acquiring a CKD or SKD kits from a global companies and only do SMT assembly or system integration in India, which gives only 10-12 percent in local value addition. In the whole process what's happening is that we are ending up doing very low value add manufacturing. This is the biggest challenge that the Indian electronics ecosystem has.DEVELOPMENT OF ELECTRONICS ECOSYSTEMCreating a component manufacturing ecosystem or supporting the Indian startups and Indian IP creator companies for successful product development is a step towards development of electronics ecosystem. Recognizing IP Technology in India also creates high manufacturing value addition. And anytime we start talking about component manufacturing, we start talking about the WHERE IS INDIAN ELECTRONICSECOSYSTEM HEADED?By Sanjeev Keskar, CEO, Arvind Consultancy
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