‘India poised to grow electronics manufacturing to $300 billion in 3-4 years’

He said that the world is looking for more reliable sources for electronics manufacturing after the outbreak of COVID-19 and India has all the necessary elements to seize this opportunity.

Chandrashekhar released a vision document on ‘Growth India’s electronics exports and share in the global value chain’, outlining the broad scale of the challenges as well as the opportunities, and for India to be around ₹75 billion in 2020-21 Suggests a policy prescription for moving the USD. 300 billion by 2025. Of the target of USD 300 billion, about 40 per cent will be exports.

The opportunity is “real”, the minister said, adding that India has the potential to leverage its strengths in electronics design, system design and software design along with manufacturing to gain global market share.

He promised that the IT Ministry is committed to provide full support to the industry through PLI (Production Linked Incentive) schemes, logistics efficiencies and enabling policy to help the industry achieve the target.

He said, “… a once in a lifetime opportunity to face where the global value chain for electronics is diversifying and looking for alternative reliable suppliers and sources of products … for India This is an unprecedented opportunity.”

According to the vision document unveiled on Tuesday, the electronics sector has the potential to become one of India’s top exports in the next 3-5 years, along with a number of products for which important export hubs can be created in the country.

“The geographic concentration of the Electronics Global Value Chain (GVC) shows that the majority of participants are in Asia. Of these, China and Vietnam are the most prominent.”

In 2020, electronics exports to China and Vietnam were 70 and 11 times that of India, respectively.

Attracting GVCs requires open trade and investment policies. Tariff and non-tariff barriers may restrict the movement of component and sub-assembly manufacturers, it cautioned.

Any constraint on investment would also be a deterrent in attracting GVCs. Stability of policies, minimizing delays in processes and incentives are important to attract FDI and ensure efficient operations.

“India’s policies should be WTO compliant as inconsistent policies can pose competitive challenges and create an uncertain investment climate,” the report said.

Time is of the essence, the report calls for a focus on setting scale, GVC and export momentum within the next 3-5 years.

“The window of opportunity is short and this time should be utilized to establish as much of the GVC as possible,” it said.

Tier 1, 2 and 3 manufacturers need to be encouraged to move manufacturing capacities for finished products, sub-assemblies and components from any country including China, Vietnam, Japan, South Korea for a period of 1-4 years Is. For this, the route of 100% FDI or joint venture can be adopted.

To develop a deep Indian ecosystem, joint ventures with international manufacturers need to be encouraged, while Indian companies need to be encouraged to supply global sub-assemblies and components to GVCs for global consumption.

The report bats for ‘co-location’ for rapid growth in scale and skill development, seeks to reduce input charges and reduce operational burden and delays related to the policy.

The stability and credibility of the policy regime requires that the declared policy is implemented effectively. This requires a monitoring mechanism that is not burdensome on its own, with emphasis on addressing deficiencies in policy implementation.

The report acknowledged the role of domestic firms in maintaining and expanding the ecosystem, even as global firms provide the foundation and impetus for India’s exports and GVC in electronics.

“During their growth process, major challenges faced by domestic firms include the disruptive effect of predatory pricing by deep-pocketed firms, the relatively high cost of money for capital investment and working capital, and especially when they face There is difficulty in gaining access to funds. Intense (and even unfair) competition,” it highlighted.

Given that small and medium firms are short of cash as compared to large firms, access to funds should be made available through banks and an interest subvention for domestic champions (or those selected for the PLI assistance programme). plan can be considered. PTI MBI MR

This story has been published without modification in text from a wire agency feed.