What's Happening?
India's electronics manufacturing sector has experienced substantial growth, driven by government initiatives such as the Production-Linked Incentive (PLI) scheme and the Electronics Component Manufacturing Scheme (ECMS). These programs aim to boost domestic
production and reduce import reliance by developing a robust supply chain ecosystem. As a result, domestic value addition in electronics manufacturing has improved significantly, currently standing at 18%-20%. The PLI scheme, launched in 2020, has positioned India as the second-largest mobile manufacturer globally, with mobile phone production more than doubling from Rs. 2.14 lakh crores in FY 2019-20 to Rs. 5.5 lakh crores in FY 2024-25. Additionally, mobile phone exports have increased eightfold during the same period. The ECMS has attracted investment commitments of Rs. 1.15 lakh crores, surpassing its target, and is expected to generate around 1.4 lakh jobs.
Why It's Important?
The growth in India's electronics manufacturing sector is crucial for the country's economic development and global competitiveness. By increasing domestic production and reducing dependency on imports, India is positioning itself as a key player in the global electronics supply chain. This shift not only enhances India's economic resilience but also creates significant employment opportunities, supporting around 12 lakh jobs in the mobile phone manufacturing sector alone. The government's strategic focus on developing the entire value chain, from components to finished products, is expected to attract further investments and strengthen India's position as a trusted global supply chain hub.
What's Next?
The Indian government plans to continue enhancing its electronics manufacturing capabilities by increasing the budgetary outlay for the ECMS from Rs. 22,919 crores to Rs. 40,000 crores. This move is expected to further boost investment and job creation in the sector. As more applications are approved under the ECMS, the domestic value addition is likely to increase, leading to greater localization of components and sub-assemblies. The continued success of these initiatives could encourage other countries to adopt similar strategies, potentially reshaping the global electronics manufacturing landscape.
