Recommendations for NPE 2.0 from Industry Stalwarts

India needs to shift its focus towards manufacturing if it wishes to establish itself as the centre of electronics in the APAC region. With NPE 2.0 right around the corner, a lot of it rests on some solid policymaking from the government at the helm of things.

The Spotlight on Indian Electronics 2020-2021, unveils about the dimensions and enormity of the Electronics Industry. With a complete overview on the Union Budget’s electronics segment, it portrays the outlook of the Electronics’ State wise policies. High Priority Market section will give you an outline of the Electronics market opportunities and trends which are changing the electronics manufacturing. At last, you will have a glimpse on the Bluechip companies. Have a great read!

Electronics Manufacturing Industry is one of the largest & fastest growing industries in the world with a size of USD 1.75 Trillion and is expected to reach USD 2.4 trillion by 2020. The demand in the Indian Electronics Market alone is expected to reach USD 400 billion by 2020. With the present growth rate, India can manufacture goods required worth USD 100 billion only. To address the gap of supply & demand, Government of India has set a vision to transform India into a global hub for ESDM sector to cater both domestic and global demand.

Higher Investments:

Sector has attracted strong investments in the form of M&As and other FDI inflows;  Companies are set to augment investments in production, distribution and R&D in the next few years; Government has received investment proposals for USD17.5 million for which they intend to provide incentives under M-SIPS scheme. Applications received before July, 2020 will be considered.

Policy support:

100 per cent FDI allowed in the electronics hardware manufacturing sector under the automatic route; Initiatives like Modified Special Incentive Package Scheme (M-SIPS) will provide a capex subsidy of 20 – 25 per cent; As per Make in India Initiative, Electronic Development Fund Policy has been approved to rationalise an inverted duty structure; Focus on local manufacturing and design LED growth of the ESDM sector, the IESA provided a budgetary support of USD110 million through schemes.

Electronics production in India has been growing at a rapid pace:

  • Total production of electronics hardware goods in India is estimated to reach US$ 47.87 billion in FY17 and is expected to reach US$ 104 billion by 2020
  • Production expanded at a CAGR of 12.60 per cent during FY07–17
  • High production is majorly contributed by accelerating demand for advanced TVs, mobile phones, computers & defence related electronic equipments during FY07 to FY15
  • During FY16, production of industrial electronics, mobile phones & LED was recorded at USD6.89 billion, USD8.25 billion & USD0.55 billion, in value terms, respectively.
  • In March 2017, Xiaomi announced its 2nd manufacturing plant along with Taiwan based company Foxconn, in Andhra Pradesh. This will help create employment in 100 nearby villages for at least 5,000 people.

Consumer electronics have the highest share in production:

According to government estimates, Consumer Electronics has the highest share (29.7 per cent) in the total production of electronic goods in India. The growth in consumer electronics over the years has been accompanied by an increase in imports in respect of certain items like LCD/LED TVs

The Electronic Components had witnessed a growth of about 23.74 per cent from the previous year which was supported by the rapid growth in domestic manufacturing of electronic components.

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