India Should Target $500 Bn In Electronics Manufacturing By FY30: NITI Aayog

The NITI Aayog in a report has said that India should aim to reach $500 Bn in electronics manufacturing by financial year 2029-30 (FY30). The government think tank also said that the target will help create 5.5 Mn to 6 Mn direct jobs in the country by the end of the same fiscal year. 

“India’s ambition to become the third-largest global economy necessitates a more ambitious vision for its technology-driven sectors. With a conducive business environment and robust policy support, including fiscal incentives and non-fiscal interventions, India should aim to achieve $500 Bn in electronics manufacturing by value terms by FY30,” added the report.

This comprises a target of $350 Bn for finished goods manufacturing and another $150 Bn from components manufacturing.

In a report titled “Electronics: Powering India’s Participation in Global Value Chains”, NITI Aayog called for fiscal, financial, regulatory, and infrastructure interventions to ramp up the production of electronics products in the country. 

Besides mobile phone manufacturing, the think tank also pitched for the need to diversify in emerging areas such as wearables, IoT devices, and automotive electronics. It also proposed promoting components and capital goods manufacturing in the country.

Besides, NITI Aayog called for incentivising research and development (R&D), tariff rationalisation, skilling initiatives, facilitation of technology transfers, and infrastructure development to build a robust electronics manufacturing ecosystem in India.

“India possesses immense potential to establish itself as a global leader in electronics manufacturing. By capitalising on emerging opportunities, enhancing value chain integration, and overcoming existing challenges, India can transform its electronics sector into a cornerstone of economic growth and job creation,” added the report. 

The report also noted that despite improved infrastructure and ease of doing business, India’s electronics market still was “relatively moderate” and accounted for a mere 4% of the global market. It also said that the country’s electronics manufacturing sector has so far been primarily focussed on just assembly with limited capabilities in design and component manufacturing.

NITI Aayog called for an urgent need to enhance India’s participation in the global value chains (GVCs) and ramp up focus on emerging segments such as semiconductors, automobiles, chemicals, and pharmaceuticals. 

The report also underlined that electronics production in the country doubled to $101 Bn in FY23 compared to $48 Bn in FY17, primarily on the mobile phones manufacturing (which constitutes 43% of total electronics production). 

The think tank also said that India’s electronics sector has “experienced rapid growth” and soared to $155 Bn in FY23. 

This comes at a time when the Centre has taken a slew of sops to spur electronics manufacturing in the country. In May, the union government reportedly began reaching out to companies and industry groups for suggestions in formulating policies to encourage electronics manufacturers, like Apple to start designing more in India.