The Indian government has approved a ₹25,000 crore incentive program to enhance domestic production of electronic components, a significant step towards reducing import dependence and enhancing India’s electronics landscape. The plan, expected to receive cabinet approval later this month, is set for implementation in April, with an estimated output of 50-60 billion dollars in components over the next five to six years, per officials acquainted with the situation.
Unlike the PLI schemes for smartphones and IT hardware, where outlays remained underutilized, this initiative will feature a tailored incentive structure to address the capital-intensive nature of component manufacturing. “In smartphones, the investments are small, but manufacturing is big. But to develop a component manufacturing ecosystem, large investments have to be made,” noted an official.
The aim is to increase the local production of emerging products and components, including Li-ion batteries, PCBs, display sub-assemblies, and camera modules, where gadgets like laptops and smartphones are estimated to be 50% of the bill of materials. It was reported by the Confederation of Indian Industry (CII) that the necessity for electronic components in India will rise noticeably to $ 240 billion in 2030 from $45.5 billion in 2023.
“These components have either a nominal production in India or are heavily import-dependent. India can hardly afford to sustain this trend of importing the priority components,” stated CII in its June 2024 report.
The government targets to raise local value addition in electronics manufacturing to 35-40% under the initiative, marking a significant jump from the current 15-18%, with a long-term vision of achieving 50% localization.
We use cookies to ensure you get the best experience on our website. Read more...
