India’s electronics manufacturing sector has become one of the fastest-growing in the world in the era of rapid technological advancement. India presently accounts for 3.3% of all electronics output worldwide and is working to improve its ecosystem for the industry. Yet, the nation continues to import a sizable share of its electrical parts from China. In order to strengthen the ecosystem in the country, the Government of India is currently exerting significant effort alongside several industry organizations & MSME’s.
MSMEs account for over 29% of the nation’s GDP, around 45% of manufacturing output, and about 48% of all exports. It isn’t an exaggeration to term them the “backbone of the country” given their tremendous contribution.
According to the national sample survey (2022), MSMEs presently employs over 90 Million people, and India’s total exports (goods and services combined) are projected to reach USD 499.67 billion in April-November 2022*.
Ease of doing business for MSMEs: Data from the Udyam Registration portal, released by the MSME Ministry more than two years after the portal’s debut, showed that 1.19 crore MSMEs registered on the portal employed 8.81 crore people. The most recent information available on the portal at the time this report was published stated that 2.05 crore women were employed out of the total.
The beginning of the Indian electronics sector may be traced to the 1960s when Dr. Homi Bhabha established an electronic committee. A strong domestic electronics component ecosystem and the significance of the electronics sector were both highlighted by this committee. This was done for a variety of reasons, some of which were strategic and some of which were related to national development. Due to this, taxes were kept high to deter the import of electronic parts from countries other than India.
The government quickly realized, nevertheless, that domestic electronics manufacturing was insufficient to meet the rising demand. The end consequence was a series of policies that reduced import duties on completed items and electronic components. Despite the regulation adjustments, Indian businesses like HCL and Wipro started working in the electronics sector. India’s manufacturing of electronic goods has increased significantly in recent years, rising from US$ 30 billion in 2014–15 to US$ 75 billion in 2019–20.
For a number of reasons, the Indian government is currently supporting domestic production of semiconductors, electronics, and electronic components. These factors consist of the issue of national security, an excessive reliance on imports, and the chip scarcity. Imported electronics and components run the risk of jeopardizing national and cyber security. In addition, the Covid19 epidemic has given India a special chance to cover the production gap by starting up new local manufacturing facilities.
In this situation, the government has launched a number of programs to encourage the production of electronics and their component parts domestically. By fostering and expanding national skills for developing key components, the National Policy on Electronics 2019 (NPE 2019) aims to support India in becoming a worldwide hub for Electronics System Design and Manufacturing (ESDM). Additionally, the government wants to create an atmosphere that would enable the sector to compete on a global scale.
The 2020 Plan for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) aims to develop the domestic electronics manufacturing ecosystem in the nation by assisting in overcoming obstacles to domestic production of electronic components and semiconductors. Likewise, in December 2021, the Ministry of Electronics and Information Technology (MeitY) authorized a comprehensive PLI plan for the expansion of the semiconductor and display manufacturing ecosystems. Also, it disclosed financial incentives of Rs 76,000 crore ($9.81 billion) that will be given out over the following six years.
The domestic demand for electrical products is always growing in a nation of 1.4 billion people. This demand will further rise in the upcoming years as India is moving quickly to implement its 5G plan. Indian manufacturers now have a great opportunity to take advantage of this and revive India’s goal to become Atmanirbhar India (A Vision of a Self-Reliant India envisaged by the Hon. Prime Minister Mr. Narendra Modi).