India's Next Big Push: Electronics Parts Manufacturing to Get ₹40,000 Crore Boost

The Indian government is setting the stage for a significant expansion in the electronics parts manufacturing sector, aiming to build a self-reliant and robust ecosystem similar to the successes achieved in mobile and semiconductor manufacturing. With the expected launch of a new scheme later this year, the government plans to allocate up to ₹40,000 crore to develop the electronics component ecosystem in India.

Government's New Initiative to Boost Electronics Manufacturing

Union Minister for Electronics and Information Technology, Ashwini Vaishnaw, announced this initiative at The Economic Times World Leaders Forum (WLF). According to Vaishnaw, this scheme will build on the momentum of the Production Linked Incentive (PLI) programs for mobiles and semiconductors, targeting the growth of the electronics component industry in India.

Vaishnaw highlighted that the value of electronics manufacturing in India has significantly increased, reaching $105 billion in 2022-23, up from $29 billion in 2013-14. "We are preparing a program where the component ecosystem can now expand in India in the same way as electronics and mobile manufacturing has expanded," he stated.

The government expects the applicants selected under this scheme to invest around ₹82,000 crore. The total value of components produced by these companies could range between ₹1.95 lakh crore and ₹2 lakh crore over the scheme's duration. The program's goal is to foster a sustainable electronics components ecosystem that promotes local manufacturing, reduces import dependency, and positions India as a global electronics hub.

Expansion of Mobile and Semiconductor Manufacturing

The minister also highlighted the government's progress in mobile phone manufacturing. Over 99% of mobile phones used in the country are now made in India, with production value surging from ₹18,900 crore in 2014 to ₹4.1 lakh crore in 2024. Vaishnaw emphasized that India's electronics manufacturing ecosystem is expanding beyond just assembling products. The government also focusing on designing, fab (fabrication), and ATMP (assembly, testing, marking, and packaging), which ensures the entire supply chain is localized within India.

In the semiconductor sector, the government is on track to complete the construction of all four approved semiconductor projects. Vaishnaw noted, "We are looking at a complete ecosystem and not just the fab. We are looking at design, fab, ATMP, creating the talent pool, and ensuring the entire supply ecosystem comes to India."

Focus on Infrastructure Development

The government's focus extends beyond manufacturing to infrastructure development across three critical areas: physical, digital, and social infrastructure. Vaishnaw mentioned that the government has approved projects worth ₹2 lakh crore, encompassing rail, road, airport, and port development since it came to power for a third term.

Highlighting progress in physical infrastructure, Vaishnaw shared that over the last decade, the government has built 370 km of railway tunnels, more than twice the number constructed before 2014. The government has laid over 31,000 km of railway tracks in the last ten years, with an average of 14.5 km per day in 2023-24. He also mentioned that trials of Vande Bharat sleeper trains would start within the next seven days.

Regarding India's first high-speed bullet train project, Vaishnaw stated that 327 km of viaducts have been constructed in the last three years, along with 21 km of undersea tunnels, which will be located 25 to 65 meters below the surface of the sea.

India Stack: Democratizing Technology

The government also aims to democratize technology to ensure that big tech companies do not hold a monopoly. Speaking at the WLF, Vaishnaw emphasized, "We must ensure that every person with a good idea gets the opportunity to test that idea and build something upon it. That is the idea behind India Stack."

India Stack is a set of open APIs and digital public goods aimed at fostering innovation and enabling every individual to access technology. This initiative aligns with the government’s broader goal to democratize technology and provide opportunities to all citizens, irrespective of their backgrounds.

The Road Ahead: A Self-Reliant Electronics Ecosystem

The launch of the new scheme for electronics components manufacturing reflects the government's commitment to building a self-reliant India. With substantial investments and a focus on expanding the ecosystem, India is poised to become a major global player in electronics manufacturing.

READ| Bajaj Housing Finance IPO Set to Open from September 9...

The upcoming scheme, along with other initiatives like India Stack, will not only create opportunities for innovation and entrepreneurship but also ensure that India’s growth story includes technological advancements and robust infrastructure development. The government’s continued emphasis on building the right environment for manufacturing and innovation will likely yield significant dividends in the years to come.