ELCINA plays a significant role in promoting local component manufacturing

  • Interviews
  • Jul 28,23
In 1967, ELCINA (Electronic Industries Association of India) established as the first industry association to support electronics hardware industry of India. Since then it has been actively working on the policy and business environment issues of the E&E Industry. In this interview Rajoo Goel, Secretary General, ELCINA shares the significant work of ELCINA giving an overview on the developments in the past years.
ELCINA plays a significant role in promoting local component manufacturing

What significant role is ELCINA playing for E&E Industry of India?
ELCINA plays a significant role in the Electronics and Electrical Industry of India through advocating for favorable policies and regulations to support electronics manufacturing and exports, representing the interests of electronics companies and serving as a unified voice for the industry with central and various state governments to iron out policy and procedural issues hampering business growth and operations; and organising seminars, workshops, and training programs to disseminate industry knowledge and promote innovation. ELCINA als providing insights and data on market trends and technological developments in the electronics sector and prepares research reports on industry and market trends for different segments and verticals to guide government policy making and industry investments. It facilitates networking opportunities to encourage collaboration and business growth and actively promoting electronics exports from India through international trade events and delegations.

What are some significant developments under PLI scheme in E&E Industry?
ELCINA has actively supported and promoted the implementation of the Production Linked Incentive (PLI) Scheme launched by the government of India. 16 applications have been approved in the first round under the PLI for large scale electronics manufacturing and 16 companies have been approved under the second round. The government on October 6, 2020, launched the PLI scheme for Mobile Phones which offer incentives of 4-6 per cent on incremental sales over a period of five years. Under the scheme, the approved companies are expected to produce more than Rs 10,50,000 crore over the next five years and around 60 per cent will be exported. It is expected to generate more than two lakh direct employment opportunities along with creation of additional indirect employment of nearly three times the direct employment. The Domestic Value Addition is expected to grow from the current 15-20 per cent to 35-40 per cent in the case of Mobile Phones.

Similarly, the government has also notified the PLI 2.0 scheme for IT Hardware, on May 30, 2023. This scheme increased the cumulative financial outlay from Rs 7,325 crore to Rs 16,939 crore with an average incentive of more than 5 per cent over six years. This revised scheme is expected to create 75,000 direct jobs and over 2,00,000 indirect jobs.

How the Indian Electronics Hardware Industry has evolved? What opportunities are there in market for companies to tap in the coming years?
Over the past decade, the Indian Electronics Hardware Industry has witnessed significant growth and transformation. Manufacturing and export volumes have increased, particularly in mobile phone manufacturing. Rising demand, the emergence of startups, and a focus on R&D and innovation have also shaped the industry. Indian Electronics manufacturing has reached Rs 625,950 crores in 2021-22 comprises of mobile phones (44 per cent), industrial electronics (16 per cent), consumer electronics (14 per cent), electronic components (13 per cent), strategic electronics (6 per cent), computer hardware (4 per cent) and LEDs (3 per cent).

Source: ELCINA report

In the coming years, there are several opportunities for companies to tap into IoT and Smart Devices, Electric Vehicles (EVs), Renewable Energy, Medical Electronics, 5G and Connectivity Solutions, Defence Electronics, and E-Waste Management. By capitalising on these opportunities and staying ahead of market trends, companies can contribute to the industry's growth and success.

What are some current challenges in Indian market for E&E manufacturers? What suggestions would you provide to overcome them?
Indian manufacturers are facing following challenges -

  • High import dependency: The industry heavily relies on imports for components and raw materials, leading to supply chain disruptions and increased costs.
  • Lack of a robust supply chain ecosystem: The absence of an efficient supply chain ecosystem hampers operational efficiency and scalability.
  • Infrastructure and logistics constraints: Inadequate infrastructure and logistics facilities cause delays and inefficiencies in material movement, affecting production timelines and costs.
  • Complex regulatory environment: Navigating through ever-changing regulations and tax policies can be challenging for manufacturers.
  • Skills shortage: There is a shortage of skilled talent with expertise in advanced technologies and manufacturing processes.
  • Quality and standards compliance: Ensuring compliance with international quality standards is a challenge, particularly for smaller companies SMEs seeking access to global markets.
  • ELCINA plays a significant role in promoting local component manufacturing in the Indian electronics industry. Through advocacy and collaboration with both industry and the government, ELCINA works to bring policy changes and implement schemes like SPECS and PLI. These efforts aim to reduce import dependency, strengthen the domestic supply chain, and boost the growth of Indian local manufacturing in electronic components, contributing to India's position as a global manufacturing hub. Continuous efforts and collaboration between the government, industry associations, and stakeholders are vital to creating an enabling environment for the sustained growth of the electrical and electronics manufacturing sector in India.

    Would you like to mention about some scheme/upcoming announcements/ growth plans for the Indian companies and manufacturers? What are some market expectations 5 years from now?
    National Policy on Electronics (NPE) 2019: The Indian government had been working on the formulation of the National Policy on Electronics, which could outline a comprehensive roadmap for the development of the electronics industry in India. The policy might focus on strengthening the entire value chain, from component manufacturing to product development, and create an enabling environment for innovation and investment.

    Production Linked Incentive (PLI) Scheme: The PLI Scheme was launched to promote manufacturing in various sectors, including electronics. It aimed to provide financial incentives to eligible companies based on their incremental sales. Over the next few years, the government might expand the scope of the PLI Scheme to include more segments within the electronics industry, encouraging further investments and growth in the sector.

    Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS): SPECS is an initiative by the Indian government to promote domestic manufacturing of electronic components and semiconductor devices. The scheme aims to reduce import dependency, attract investments, strengthen the supply chain, and foster innovation in the electronics industry. It incentivizes companies to set up manufacturing facilities within India, contributing to self-sufficiency and growth in the sector. SPECS aligns with the government's "Make in India" initiative and supports the development of the Indian electronics industry.

    The Indian government has implemented Phased Manufacturing Programs (PMP) for two types of electronic devices:
    Wrist Wearable Devices (Smart Watches): A PMP has been notified for smartwatches falling under HS 8517 62 90 through Notification No.11/2022-Customs dated 01.02.2022. The program aims to encourage domestic manufacturing of smartwatches and their components.

    Hearable Devices: A PMP has been notified for Hearable Devices and their inputs, parts, and sub-parts through Notification No.12/2022-Customs dated 01.02.2022. Hearable devices are electronic devices worn in or around the ear, used for communication and entertainment purposes.

    The purpose of these PMPs is to promote local manufacturing and reduce dependence on imports, thus strengthening the domestic electronics industry.

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