In the dynamic landscape of global electronics manufacturing, India has made substantial strides, underscored by initiatives such as “Make in India.” The nation is strategically positioning itself to capitalize on the shifting preferences of global companies, moving production away from China. This transition not only aims to cater to the increasing demand for electronic goods but also seeks to reduce dependence on imports, fostering self-reliance and technological autonomy.
Government Initiatives: Paving the Way for Growth
The Indian government has been proactive in implementing a range of initiatives to propel the electronics manufacturing sector forward. Programs like Make in India, the National Policy on Electronics (2019), and the Production Linked Incentive (PLI) scheme are integral components of this multifaceted approach. These initiatives collectively incentivize domestic manufacturing, localize electronics production, attract foreign direct investment, and stimulate export growth. The Electronics Manufacturing Clusters (EMC) Scheme further contributes to creating a self-reliant and globally competitive electronic manufacturing ecosystem in India.
Challenges and Opportunities
Despite the progress, challenges persist. Infrastructural limitations and bureaucratic hurdles demand attention for sustained growth. Streamlining regulatory processes, addressing infrastructural gaps, and fostering research and development are imperative to further bolster the electronic product manufacturing landscape. A robust supply chain and a focus on innovation will enhance India’s competitiveness in the global electronics market.
Adapting Strategies for Resilience and Mitigating FTA Threat
The recent global economic and geopolitical crisis has presented challenges, including supply chain disruptions, increased raw material costs, and fluctuating currency values. However, these challenges have also emphasized the importance of self-reliance. Indian manufacturers are adapting strategies, diversifying supply chains, and leveraging government incentives to mitigate the impact, fostering resilience in the face of global uncertainties.
The threat posed by Free Trade Agreements (FTAs) with other nations, leading to duty-free imports, especially from Chinese companies, necessitates strategic initiatives from Indian electronic product manufacturers. Investing in research and development, establishing robust supply chains, improving infrastructure, and collaborating with government incentives are key strategies. Fostering skill development programs ensures a competent workforce, and emphasizing quality, innovation, efficiency, and collaboration with policymakers will enable Indian manufacturers to stand resilient against Chinese competition.
Towards Self-Reliance in Advanced Electronics
India’s journey toward self-reliance in advanced electronics mirrors China’s historical trajectory. While India has excelled in chip design, it lags behind in chip manufacturing. Addressing this gap is crucial to achieving true success in the electronics policy, emphasizing the need for continued efforts in this transformative era.
Future Projections: Meeting Economic Milestones
The expansion of India’s electrical machinery and equipment sector, with exports surging from US$ 10.76 billion to US$ 18.84 billion between 2012 and 2021, highlights the impact of initiatives like Make in India. Boosting electronic product exports is pivotal for economic growth, contributing to trade balance, global competitiveness, and employment opportunities.
As India aims for a $5 trillion GDP and a $1 trillion digital economy by 2025, the growth projection of the electronic products sector to $400 billion demands a fortified domestic manufacturing sector. The government’s initiatives, particularly the PLI scheme, exemplify a forward-looking strategy, offering incentives to eligible companies over a five-year period. The National Policy on Electronics (2019) aligns with these goals, envisioning India as a global hub for electronic system design and manufacturing.
In this transformative era, India stands at a crucial juncture. The nation must seize the opportunity to enhance its electronics hardware export and manufacturing capabilities, aligning them with software progress to position itself as a global powerhouse in the electronics domain. The implementation of these strategies is imperative for India not to miss the bus in this dynamic and evolving landscape.
Mr. Manoj Tayal is a Managing Director at UKB Electronics