Schedule a Call Back
China dominates electronic components supply for 'Made in India' products
Industry News- Aug 19,24
In 2023-24, India's total electronic components imports reached $34.4 billion, making them the fifth largest import category.
In the 2023-24 financial year, India imported electronic components worth over $12 billion from China and $6 billion from Hong Kong, with these two regions accounting for more than half of India's total electronic components imports. Despite India's growing presence in electronics manufacturing, this heavy reliance on China and Hong Kong indicates that the country has yet to significantly reduce its dependence on Beijing for these crucial supplies.
Over the past five years, imports of electronic components from China and Hong Kong have consistently outpaced those from other major manufacturing hubs such as South Korea, Japan, Taiwan, and all ASEAN countries combined. In 2023-24, India's total electronic components imports reached $34.4 billion, making them the fifth largest import category after crude oil, gold, petroleum products, and coal, according to data from the Ministry of Commerce.
In 2019-20, India imported over $10 billion worth of electronic components from China and Hong Kong, representing 62% of total imports in this category. Although the value of imports dipped slightly to $9.5 billion in 2020-21, the share of these two regions remained steady at 62%. By 2021-22, imports from China and Hong Kong nearly doubled to $17.7 billion, accounting for more than 68% of total imports. Although their share slightly decreased to 49.7% in 2022-23, China and Hong Kong have consistently been the dominant suppliers.
Experts suggest that imports from Hong Kong should be viewed as Chinese imports since many mainland Chinese companies operate there. When compared to imports from other electronics hubs like South Korea, Japan, Taiwan, and ASEAN countries, China and Hong Kong have outperformed these regions in supplying electronic components to India for most of the last five years. This dominance persists despite India's free trade agreements with ASEAN countries, Japan, and South Korea.
India's emergence as a key assembly hub for smartphones has been significant, with nearly all phones sold in India now assembled domestically. For example, India exported smartphones worth around $15 billion in 2023-24, with iPhones contributing 65%, or about $10 billion. However, this growth has increased India's reliance on imported electronic components, as the country currently lacks a substantial manufacturing base for critical parts like printed circuit boards, integrated circuits, and advanced displays.
A senior government official acknowledged that China's manufacturing base, developed over the past three to four decades, makes it challenging for India to quickly decouple from Chinese suppliers. Even as Apple expands its operations in India, the number of its contractors in mainland China increased to 157 in 2023, up from 151 the previous year, while Indian suppliers remained at 14.
In response, the Indian government is reportedly working on an incentive scheme for electronic components, with an expected outlay of Rs 300 billion to Rs 400 billion. While India's smartphone factory output and exports have risen, local value addition remains low, currently at around 15%, compared to a more desirable 35-40%.
Despite tensions in India-China relations, including restrictions on Chinese social media companies and increased scrutiny on investments, India is gradually opening up to the idea of allowing more Chinese entities to establish operations in partnership with domestic firms through joint ventures. The Economic Survey 2023-24 suggests that while India should reduce its dependence on Chinese imports, it should continue to welcome investments from Beijing.
(Indian Express)
China
Hong Kong
electronic components
electronic manufacturing
Indian exports
Indian imports
imports
exports
trade
Made in India
Indian manufacturing
Related Stories
Railways
Indian Railways and Wabtec partner to boost global locomotive exports
The plant in Bihar will produce locomotives specifically for international clients.
Read morePolicy Regulation
India to become $10 trillion economy by 2032; Overtaking US and China
India's economic expansion has accelerated in recent years; while it took 63 years, from 1947 to 2010, to reach a GDP of $1 trillion, it achieved $2 trillion by 2017 and $3 trillion by 2020.
Read moreOther Industrial Products
Deccan Gold Mines Ltd.’s subsidiary DGMoZ, ships first lithium ore to China
The shipment, totalling 150 tons with a grade of 2.5% Li?O, marks DGML’s debut in the fast-growing lithium market.
Read moreRelated Products
latest News
Subscribe to iNoW
For Industry News on WhatsApp, Give a Miss Call on: +91 84228 74016
