 "Niti Aayog, Niti Aayog CEO")
Niti’s report advocated for specific interventions such as promoting components and capital goods manufacturing. | (Photo: https://www.niti.gov.in/)
India should aim for $500 billion in domestic electronics manufacturing by 2030, the NITI Aayog has said in a report recommending specific policy measures like tariff rationalisation and skilling.
Growth in electronics manufacturing would create employment for about 6 million people, said the central government’s think tank on Thursday.
“Global Value Chains (GVCs) are critical in modern manufacturing, involving international collaboration across design, production, marketing, and distribution. They represent 70 per cent of international trade, highlighting India’s urgent need to enhance its participation, especially in electronics, semiconductors, automobiles, chemicals, and pharmaceuticals. Electronics, in particular, is pivotal, with 75 per cent of its exports originating from GVCs,” it said in the report.
India’s electronics sector has experienced rapid growth, reaching $155 billion in FY23. Production nearly doubled from $48 billion in FY17 to $101 billion in FY23, driven by mobile phones, which now constitute 43 per cent of total electronics production.
India has reduced its reliance on smartphone imports and now manufactures 99 per cent domestically, NITI Aayog said.
The report called for specific policy interventions such as promoting components and capital goods manufacturing, incentivising research, tariff rationalisation, skilling initiatives, facilitation of technology transfers, and infrastructure development to foster a robust electronics manufacturing ecosystem in India.
“Initiatives like Make in India and Digital India, improved infrastructure and ease of doing business, supported by various incentives, have stimulated domestic manufacturing and attracted foreign investments. Despite these strides, India’s electronics market remains relatively moderate, accounting for only 4 per cent of the global market, which has so far focused primarily on assembly, with limited capabilities in design and component manufacturing,” said the Aayog.
It said that a business-as-usual scenario would lead to electronics manufacturing growing to $278 billion by 2029-30. This would include $253 billion from finished goods and $25 billion from components manufacturing. Employment generation is expected to grow substantially to around 3.4 million, with exports reaching $111 billion.
First Published: Jul 19 2024 | 2:35 PM IST
