The Indian government has launched an enhanced $2 billion Production Linked Incentive (PLI) scheme to boost electronics hardware production, including laptops and tablets. This initiative supports the sector's growth, which has expanded from $70 billion in 2018-19 to $115 billion in 2023-24. The government aims for $500 billion in domestic electronics manufacturing by 2029-30, emphasizing local component production and attracting investments. With strategic policies and a focus on digitization, India is positioned to become a global hub for electronics manufacturing.
The Indian government has unveiled an enhanced Production Linked Incentive (PLI) scheme for electronics hardware, allocating over $2 billion to encourage companies engaged in the production of laptops, tablets, and various electronic devices. This initiative reflects the government's commitment to bolstering the electronics sector, which has emerged as a cornerstone of manufacturing growth over the past decade.
Thanks to a series of strategic initiatives such as ‘Make in India,’ ‘Digital India,’ ‘Startup India,’ and improvements in the 'Ease of Doing Business,' the electronics industry has witnessed remarkable growth. From a market size of $70 billion in 2018-19, it has surged to an impressive $115 billion in 2023-24, representing a compound annual growth rate (CAGR) of 15.7%. Exports of electronic goods have also soared, growing at a CAGR of 31.25% to reach $29.1 billion in 2023-24. However, there is still room for improvement, as the production of electronic components has risen from approximately INR 52,009 crore ($7 billion) in 2015-16 to around INR 86,000 crore ($10.75 billion) in 2022-23, indicating a reliance on imports for many components.
Recognizing the importance of a robust supply chain, the Government of India is focusing on developing a comprehensive ecosystem for electronic components manufacturing, aiming to position India as a global hub for Electronics System Design and Manufacturing. The country’s favorable policy environment, along with cooperation between central and state governments, has created a conducive atmosphere for relocating manufacturing operations to India. The push for supply chain diversification, especially in the wake of the COVID-19 pandemic and shifting global geopolitical dynamics, has further accelerated this trend.
India’s competitive manufacturing wages and ongoing infrastructure improvements through initiatives like Bharat Mala, Sagar Mala, and PM Gati Shakti are enhancing capital productivity and increasing the Investment-to-GDP ratio, fostering a positive economic cycle. The concerted efforts toward digitization have ushered in a new digital era, with India leading in mobile commerce, where consumers increasingly engage in e-commerce via their smartphones. Digital payments have surged, reaching $164 billion in the 2024 fiscal year, driven by a growing reliance on digital solutions across education, healthcare, and governance.
Given the rising domestic demand for consumer electronics and the government’s ambitious goal of achieving $500 billion in domestic electronics manufacturing by 2029-30, the future looks bright for India’s electronics industry. The nation has demonstrated its manufacturing capabilities across four major segments—mobile phones, consumer electronics, IT hardware, and electronic components—accounting for over 70% of its domestic manufacturing landscape. Notably, India has risen to become the second-largest mobile phone manufacturer globally and the fastest-growing smartphone market.
The Indian government is implementing a range of policies to bolster the electronics ecosystem, attracting investments throughout the value chain. Although challenges such as demand-supply gaps, import dependency, and limited infrastructure persist, the National Policy on Electronics (NPE) introduced in 2012 has laid a solid foundation for overcoming these hurdles. Initiatives like the Modified Special Incentive Package Scheme (M-SIPS) and Electronics Manufacturing Clusters (EMC) have further strengthened national efforts in this sector.
Recent updates to the NPE emphasize a holistic approach to technology development and capital expenditure incentives, alongside the rollout of the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). Public-private partnerships continue to enrich the talent pool, ensuring that the industry’s workforce meets the growing demand for skilled professionals.
While the initial focus of the Phased Manufacturing Programme (PMP) for mobile phones was on increasing domestic value addition, the landscape is evolving. New players are entering the Indian market, establishing operations in complex sub-component manufacturing, including display assembly and camera modules, thereby enhancing local capabilities.
With a vision to achieve $500 billion in electronics production and 40% export by 2029-2030, India is taking substantial steps to build a resilient electronics ecosystem. The revised PLI for electronics hardware and the launch of the India Semiconductor Mission, with an ambitious budget of $10 billion, signify the government's commitment to advancing semiconductor design and manufacturing.
State governments are also stepping up, offering incentives like affordable land and subsidized electricity to attract investment. The enthusiastic response to the Semicon India program has paved the way for the upcoming Semicon 2.0 initiative.
To nurture a skilled workforce, the Chips to Startup Programme has been launched, collaborating with over 100 institutions to provide hands-on training in electronics. The government is also actively pursuing technology development and securing raw materials through initiatives like Khanij Bidesh India Limited (KABIL), which aims to ensure the availability of essential resources for the electronics industry.
As India positions itself as a reliable global partner in electronics, addressing import dependencies, trade agreements, and rationalizing tax structures will further enhance its competitive edge in the international market. With strong collaboration among industry stakeholders and government support, India is well on its way to realizing its vision of becoming a global electronics hub.
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