India has the potential to become a $100 billion market for laptops and tablets through local manufacturing in the next five years, contributing 18 percent to global exports of these devices, says a research done by Ernst & Young (EY) and electronics manufacturing body ICEA. “By making in India for the world and obtain a sizable share of the global market will give us a manufacturing value of US$ 100 billion by 2025,” said Pankaj Mohindroo, Chairman, India Cellular & Electronics Association (ICEA) to Economic Times.
Calling for a focused PLI scheme, ICEA said the government must bring out such scheme which can address the disabilities like taxes, cost of machinery, land, power, labour and working capital etc.
“It will also create five lakh additional jobs and a cumulative inflow of foreign exchange to the tune of US$ 75 billion; and investment of over US$ 1 billion. At the same time, it would negate imports of targeted products from China leading to reduced trade deficit and greater self-reliance,” he said.
Currently, 87 percent laptops and 63 percent tablets are imported mostly from China for fulfilling domestic demand. The basic customs duty on these products is nil because there is an inherent cost arbitrage and benefit to importing these devices as against their manufacturing in India. “Therefore, unless exports are promoted, it is unlikely that the domestic market will offer any additional growth for companies aspiring to manufacture in India,” the report said.
India currently suffers a cost disability of 7.52–9.8 percent vis-à-vis Vietnam and 17.32–19 percent vis-à-vis China for the manufacturing of these products locally. China is the predominant supplier of laptops, tablets and desktops holding 66 percent share of the global market for these products which stood at $240.99 billion in 2019. Lenovo, HP, Apple, Dell, Acer and Asus constitute 90 percent of the global market for laptops.
ICEA expects India could contribute to 26 percent of this market, (18 percent of exports), in five years if cost disabilities of manufacturing in India are addressed coupled with right policy incentives to companies.
