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India's electronics manufacturing surges, eyes $115 bn in 2024
Industry News- Jan 03,24
The production of mobile phones, a key player in India's electronics manufacturing, is anticipated to exceed $50 billion by March 2024, up from approximately $42 billion in the previous fiscal year.
In 2024, the electronics manufacturing sector in India is poised for a 15% growth, reaching a total value of $115 billion. Industry players are concentrating on enhancing value addition in terms of components and product development.
The production of mobile phones, a key player in India's electronics manufacturing, is anticipated to exceed $50 billion by March 2024, up from approximately $42 billion in the previous fiscal year.
By the first quarter of 2024, the manufacturing of Google's Pixel smartphones in India will mark the complete presence of all major global players in the country.
Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), stated that the total production of electronic goods for the financial year 2023-24 is estimated to reach $115 billion, with a substantial contribution from mobile phones expected to surpass $50 billion in the current fiscal year.
Government data reveals that domestic electronics manufacturing has surged over four-fold to Rs 8.22 lakh crore or $102 billion in the last decade, compared to Rs 1,80,454 crore ($29.8 billion) in FY14.
Mohindroo added that mobile phone exports are projected to reach $15 billion in FY24, reflecting a 35% growth over the previous fiscal year. According to ICEA estimates, mobile phone exports during April-November of the current fiscal year have already surpassed $9 billion, compared to $6.2 billion during the same period last year.
Despite the growth in indigenous electronics manufacturing in terms of value and volume, former RBI Chairman Raghuram Rajan's comments questioning the level of value addition sparked a debate. Union ministers Ashwini Vaishnaw and Rajeev Chandrasekhar criticised Rajan's remarks, asserting that the industry has achieved new heights in manufacturing complex technology products.
Vaishnaw highlighted that local value addition in many electronics products has increased to up to 60%, projecting India's potential as a significant component exporter in the next three to four years.
With a focus on deep manufacturing and increased localisation, Mohindroo emphasised that the mobile phone industry has achieved near self-reliance in components such as Printed Circuit Boards Assembly (PCBAs), chargers, battery packs, and cables.
In the pursuit of building a semiconductor ecosystem, the government secured a breakthrough with a $2.75 billion project by Micron to establish an assembly and test plant for memory chip modules, supported by 70% fiscal support from the government. However, the unexpected dissolution of the Vedanta-Foxconn joint venture for a semiconductor plant led to separate initiatives by both entities.
Tata Electronics, Foxconn, and HCL Group have submitted applications to establish semiconductor plants, aiming to contribute to the production of the most critical and expensive component in modern electronic devices.
ELCINA estimates the electronics component manufacturing base in India to be valued at over $11 billion, while the demand exceeds $40 billion. ELCINA Secretary General Rajoo Goel emphasised the need for a special scheme for other components to complete the ecosystem, as existing Production Linked Incentive (PLI) schemes are not tailored for value-added manufacturing.
Consultancy Techarc's Chief Analyst Faisal Kawoosa noted that value addition in mobile devices has increased from 5-6% to up to 28%, suggesting a push for design in India products to enhance value addition.
The industry's emphasis on localisation is evident, with some components and Printed Circuit Board Assembly (PCBA) designs already being produced in India. GX Group CEO Paritosh Prajapati announced increased investment plans of $60 million (Rs 500 crore) to align with domestic market demand and new technology trends.
Rajkumar Upadhyay, CEO of the Centre for Development of Telematics (C-DoT), highlighted the government's efforts to promote local product development and design, citing support for startups contributing to the development of 4G, 5G, and even 6G technology domestically.
In 2024, the electronic manufacturing services segment experienced growth, with domestic players like Dixon Technologies, Syrma SGS Technology, and Optiemus Electronics gaining prominence.
Optiemus Electronics Managing Director A Gururaj expressed optimism about greater acceleration and momentum in the electronics manufacturing sector in 2024. The company aims to increase the localisation of components and processes in manufacturing electronics products in India, targeting a rise in the hardware's bill of material localisation from 20% to 45% in the next year.
India
Semiconductor Ecosystem
Production Linked Incentive
ELCINA
4G
5G
6G
Dixon Technologies
Syrma SGS Technology
Optiemus Electronics
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