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Indian Electronics Industry Must Harness Global Value Chains

By incorporating global value chains into India and nurturing the development of domestic enterprises in the electronics manufacturing sector, India has the potential to emerge as a dominant force in the global electronics industry

The India Cellular and Electronics Association (ICEA) stands at the forefront of the nation’s thriving electronics ecosystem, driving innovation, growth, and sustainability. As the premier trade body representing the interests of the mobile handset and electronics sector, ICEA is the powerhouse behind India’s transformation into a global electronics manufacturing hub.

ICEA also brings together industry leaders, policymakers, and innovators to shape the future of the electronics landscape. Its dynamic advocacy and strategic initiatives have catalyzed unprecedented growth, making India a pivotal player on the global stage. The association’s relentless efforts have attracted marquee investments, fostered cutting-edge R&D, and propelled exports to new heights.

ICEA’s influence extends beyond advocacy; it is a crucible for collaboration and knowledge exchange. Through high-impact forums, workshops, and industry reports, the association equips its members with insights and tools to navigate the fast-evolving market. Furthermore, it champions policies that spur innovation, enhance competitiveness, and drive digital inclusion, ensuring that the benefits of technology reach every corner of the nation.

In an exclusive dialogue with The Interview World, Rajesh Sharma, Executive Director and Principal Advisor of ICEA, highlighted the robust growth trends in the Indian electronics manufacturing industry. He also emphasized the government’s policy initiatives aimed at accelerating growth and positioning the industry as a major global player. Here are the key insights from his discussion.

Q: What is the current growth trend of the electronics manufacturing industry in the country, and what policies and initiatives are being implemented to support and boost the growth of this industry?

A: The tremendous growth in electronics manufacturing, which has surged by nearly 400% over the past 7-8 years, has skyrocketed from approximately $30 billion to $120 billion. The government has identified this sector as a major focus area, allocating around $30 billion in incentive policies to bolster its development. These policies support large-scale electronics manufacturing, component manufacturing, IT hardware manufacturing, and significantly contribute to building a robust semiconductor ecosystem.

We aim to sustain this growth trajectory, targeting over $400 billion by 2030, within the next four years. Achieving this milestone would position us as the second-largest electronics manufacturer in the world.

Q: What comprehensive strategies and initiatives is India adopting to establish itself as a key global player in the electronics manufacturing space?

A: Building a comprehensive electronic manufacturing ecosystem is a key focus area, particularly because the semiconductor industry is crucial. Currently, only 2-3 countries possess the necessary technology for semiconductor production.

Semiconductors also play a significant role in the manufacturing sector. Given the geopolitical landscape, it’s essential to build resilience and avoid relying solely on a few sources. Consequently, the country has committed to establishing a self-reliant semiconductor ecosystem.

To support this initiative, substantial incentive structures have been created to attract investments. So far, nearly four projects have received approval and are actively being developed. These projects are progressing in both manufacturing and skill establishment.

We anticipate that the first made-in-India semiconductors from these plants will be produced by early next year.

Q: How can the government support this industry through policy initiatives?

A: The government is actively addressing this issue by focusing on two key aspects.

First, given the global nature of this industry, it is crucial to integrate India into global value chains. To achieve this, policies are also being structured to make these value chains attractive and conducive for operations in India.

Additionally, these policies aim to enhance India’s competitiveness to attract top investors.

On the other hand, the government is also committed to nurturing Indian companies. The goal is to ensure that, in the long term, Indian firms grow into large, influential entities.

Thus, the government’s efforts are twofold. First, integrating global value chains into India and second, fostering the growth of domestic companies in the electronics manufacturing sector.

Q: Do you believe that Indian electronics products will achieve the same quality and competitiveness as those from leading global manufacturers?

A: Certainly, I have no doubts. It’s simply a matter of time. Soon, we’ll see companies and brands emerging that rival the best worldwide. We’re currently crafting products for global companies, and Indian brands will inevitably elevate their presence and join the global market fray.

Q: What are your thoughts on the frequent requests for tax holidays by Indian electronics manufacturers?

A: The shifting paradigm of thought is evident in the global competitiveness landscape. To remain relevant and competitive on a global scale, serving merely the Indian market, which constitutes a mere 2-3% of the world market, is no longer sufficient.

Thus, recognizing the need for broader market outreach, entrepreneurs and businesses comprehend the paramount importance of scale. With scale, comes competitiveness, a vital factor in penetrating diverse markets.

Consider the trajectory of our exports, currently hovering around $30 billion. As this figure escalates, reaching the envisioned $100 billion benchmark in electronics exports, a pertinent question arises: Who will cater to our demands? The answer is clear: Our competitiveness in the global arena drives our export prowess.

ICEA - Driving Innovation, Growth, and Sustainability in Electronics Manufacturing
ICEA – Driving Innovation, Growth, and Sustainability in Electronics Manufacturing
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