India's Electronics Manufacturing Surge: A Global Tech Hub in the Making
India, Saturday, 9 November 2024.
India’s electronics manufacturing sector is experiencing rapid growth, positioning the country as a global tech powerhouse. With mobile phone production soaring and ambitious targets for electronics exports, India is transforming its digital landscape and attracting significant investments in semiconductor manufacturing.
Expanding Manufacturing Capabilities
India’s electronics system design and manufacturing (ESDM) sector is witnessing unprecedented growth, bolstered by strategic government initiatives and global partnerships. The sector, which encompasses IT, telecom, consumer electronics, and more, is crucial to India’s ambitions of achieving a US$ 1 trillion digital economy by 2025. With India as the second-largest mobile phone manufacturer globally, the country’s production value for mobile devices hit an impressive US$ 49.16 billion in 2024[1]. This rapid expansion is supported by the government’s Production Linked Incentive (PLI) scheme, which attracted investments of Rs. 8,390 crore (US$ 1.01 billion) in June 2024 alone[1].
Government Initiatives Driving Growth
The ‘Make in India’ and ‘Digital India’ initiatives are pivotal in propelling the ESDM sector forward, with significant allocations in the Union Budget 2023-24 supporting electronics manufacturing. The government has earmarked Rs. 16,549 crore (US$ 2 billion) for the Ministry of Electronics and Information Technology, indicating a near 40% increase from the prior year[1]. Such investments are aimed at fostering innovation, boosting local manufacturing, and creating job opportunities across India. Moreover, foundational work for three major semiconductor projects valued at Rs. 1.25 lakh crore (US$ 14.97 billion) was laid in March 2024, underscoring the government’s commitment to strengthening the semiconductor ecosystem[1].
The Role of International Collaborations
International collaborations are playing a pivotal role in enhancing India’s electronics manufacturing capabilities. A notable development is the planned US$ 7.5 billion semiconductor facility in partnership with Taiwan, aimed at bolstering India’s capacity to supply critical components for 5G and electric vehicles[1]. Additionally, MoUs signed with 20 Korean companies by Vedanta Group at the ‘Korea Biz-Trade Show 2023’ highlight the increasing foreign interest in India’s electronics sector[1]. These partnerships are essential for technology transfer, investment influx, and enhancement of local expertise.
Future Outlook and Industry Challenges
With the Indian electronics market projected to reach US$ 520 billion by 2025, the demand for electronic products is expected to surge from US$ 33 billion in FY20 to US$ 400 billion by 2025[1]. This growth trajectory is buoyed by rising consumer preferences for smart technology and increased disposable incomes. However, the industry faces challenges, such as maintaining supply chain resilience and addressing the demand for skilled workforce. The upcoming SemiX Summit 2024 in Mumbai, focusing on semiconductor innovation, reflects the sector’s strategic efforts to address these challenges by fostering research, workforce development, and entrepreneurship[2].
Conclusion: A Tech Hub in the Making
India’s ascent as a global tech hub is evident through its burgeoning ESDM sector. The combination of government support, international collaborations, and strategic investments is setting the stage for India to become a leader in the global electronics manufacturing landscape. As the nation continues to cultivate its digital ecosystem, the future looks promising for India’s role as a key player in the global technology sphere.