New Delhi: India is enhancing its role as a global manufacturing center, with the value addition in electronics manufacturing rising from 30 percent to approximately 70 percent, and it is expected to reach 90 percent by FY27, as reported by Axis Capital.
With the implementation of a new components policy, the nation aims to boost value addition from the current 15-16 percent to between 40-50 percent. Over the past decade, mobile phone exports have surged by 77 times.
India has significantly reduced its imports of completely built air conditioners (CBUs) from 35 percent in FY19 to a mere 5 percent in FY25. Essential components such as compressors, copper tubes, and aluminum coils are now being produced domestically.
In FY24, around 8.5 million RAC compressors were imported, but it is anticipated that all of these will be manufactured locally within the next 2-3 years.
The demand for Printed Circuit Board Assembly (PCBA) has seen a substantial increase in both the business and consumer markets, aided by higher import duties.
Until 2016, India was importing more electronics than it was producing. However, this trend has reversed. Thanks to the "Make in India" initiative, local production now exceeds imports by approximately 24 percent as of FY24.
Electronics exports are experiencing rapid growth, with a compound annual growth rate (CAGR) of about 26 percent projected from FY16 to FY25.
Imports of mobile PCBAs, which were valued at approximately Rs 300 billion in FY18, have plummeted to nearly zero by FY24. With the implementation of new policies, India is shifting towards domestic production of PCBs and other electronic components.
India is rapidly establishing itself as a leading destination for global electronics manufacturing and exports. This progress is bolstered by favorable government initiatives such as the Production Linked Incentive (PLI), Phased Manufacturing Program (PMP), and the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). Coupled with a skilled labor force and enhancing infrastructure, the country is making significant strides in the global supply chain.
To entice manufacturers, the government has slashed the corporate tax rate to a mere 15 percent for new manufacturing entities. Alongside the global "China +1" strategy and streamlined export procedures, India is increasingly recognized as a viable alternative for international companies.
Currently, India ranks as the second-largest mobile phone manufacturer worldwide, with approximately 99 percent of the phones sold in the country being produced locally.
