The government of India is in the process of revamping the National Policy on Electronics to boost various sectors and integrating India into global value chains to tackle the discrepancies in the current policy and ensure that India’s electronics manufacturing sector meets its ambitious targets.
This revamping aims to address the industry’s current challenges and align with the goal of generating USD400 billion from the ESDM sector by 2025 and rejuvenate electronics manufacturing industry and bolster exports.
India’s electronics manufacturing sector has seen tremendous growth, with output reaching $115 billion and exports totalling $29.1 billion, making it the country’s fifth-largest export category.
Since the Union Budget 2024-25 is round the corner which may be presented on 24th July, the government has the chance to realise the dreams of the electronics industry by working on the recommendations of the industry associations on the key domains including mobile phones, IT hardware, capital goods, components, consumer electronics, automotive electronics, medical electronics, industrial and strategic electronics, closed-circuit televisions (CCTVs), wearable and hearable devices, and LED lighting. The industry bodies are urging the government to consider significant changes in the upcoming Union Budget to enhance the competitiveness of India’s electronics industry.
Industry’s recommendations of bringing components used in electronic goods under the PLI scheme and rationalising tariffs on inputs in the upcoming budget seems to be valid demands. The demands aimed at attracting global value chains and scaling up production and exports in the next years to come.
The industry bodies have few recommendations for this budget. It includes: duty for input parts of sub-assemblies to 0%; Peak duties for sub-assemblies: Reduce from 20% to 15%; Remove 2.5% nuisance tariffs on input parts and Allocate Rs 35K-40K crore for parts PLI.
The following recommendations are also worth consideration in the long-term development of the industry Viz. Rs 75,000 crore over 3-5 years to establish collaborative R&D centres, Rs 10,000 crore over 3 years to train manpower for high-end semiconductor and parts manufacturing, higher local value addition, requiring significant improvement, one-day customs clearance turnaround, reduced from the current 3 days, zero duties on raw materials for electronics parts in the national technology policy for 3 years.
In order to create a self-reliant and sustainable electronics manufacturing industry, it is important to develop a components and sub-assembly ecosystem in India. For the same the government should provide appropriate policy and financial support for building large-scale components and sub-assembly ecosystems.
At the time when the electronics companies are shifting from China to other parts of the world, our vision should be to make the congenial and investment friendly atmosphere along with offering the level playing ground to domestic manufacturers so as to elevate the current growth trajectory of electronics manufacturing to new heights.
By implementing focused policies, providing financial support, and maintaining globally competitive tax regimes, India can emerge as a leader in the global electronics industry. This is the moment to harness our potential through innovation, self-reliance, and strategic planning.
