Indian electronics Industry and prospects


As per Global Manufacturing Competitiveness Index 2013 prepared by the Deloitte Touche Tohmatsu Ltd Global Manufacturing Industry Group and the Council on Competitiveness, India ranks 4th and will acquire 2nd position in the by 2018. India has set benchmarks in the international market with respect to quality in manufacturing. The country is currently second only to Japan in hosting companies awarded for quality excellence.

India, one of the fastest growing consumer markets in the world, currently consumes electronics worth billions of dollars. The Government, through its policy initiatives, seeks to transform the Indian electronics manufacturing sector to a US$ 400 billion market by 2024. Such initiatives create an opportunity for companies in the Electronic System Design & Manufacturing (“ESDM”) sector to look at India as their next destination to cater to the domestic demand and act as an export hub.

  • Value of electronics produced in India has reached USD 70 Billion estimated in 2019-20 from USD 29 Billion in 2014-15.

  • India’s share in global electronics manufacturing has grown almost 2.5 times in 6 years i.e. from around 1.3% in 2012 to 3.3% in 2019.

  • Export of electronic goods have also increased from USD 6.4 Billion in 2017-18 to USD 11.3 Billion in 2019-20.

World-class Technology at an Affordable Price

India is recognized as an important country in terms of electronics design, and as a result, a number of MNCs have already opened their R&D centers in India. A huge domestic market and increasing export opportunities have placed the Indian electronics industry in an enviable position on the global map. India is well recognized for its R&D hubs, design and engineering services and ESDM. India has and is gaining recognition as one of the best low cost destinations for manufacturing. In the recent years, with costs rising in other countries, India has been able to further get recognition on the cost front. The other benefits India enjoys are strong and growing domestic demand; a highly talented workforce (especially for design and engineering services) with good communication skills; and the new schemes such as

  • Production Linked Incentive Scheme (PLI): The scheme is proposed to offer a production linked incentive of 4% to 6% to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units.

  • Scheme for Promotion of Manufacturing of Electronics Components and Semiconductors (SPECS): The scheme will provide financial incentive of 25% on capital expenditure for the identified list of electronic goods that comprise downstream value chain of electronic products, i.e., electronic components, semiconductor/ display fabrication units, ATMP units, specialized sub-assemblies and capital goods for manufacture of aforesaid goods, all of which involve high value added manufacturing.

  • Electronics Manufacturing Clusters (EMC) 2.0: EMC 2.0 scheme envisages to create qualityin frastructure (with minimum area of 200 acres) along with industry specific facilities

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Historically, the Indian electronics industry dates back to the 1960s, when it was initially focused on the development and maintenance of fundamental communication systems.  Main players in India were public sector giants.  During 1980s and 1990s, Indian electronics industry witnessed a steep growth due to the liberalization, mainly in the consumer electronics are, driven primarily by the growing middle class with a higher disposable income.  The 1980s saw growth rates in excess of 30 percent.

The emergence of a business-friendly economic environment in India has attracted almost all major consumer electronics players from South Korea, Japan, USA, Germany, UK and China etc.  They import as well manufacture locally to sell in the large domestic Indian market.  India’s burgeoning software sector is generating huge demand for IT hardware and components in the domestic market.


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