Make in India, Self-Reliant India (Aatmanirbhar Bharat), vocal to local, are the big words today turning heads across the globe. The Indian government has the right initiatives to boost the country’s economy through deluging interest in manufacturing in India. In terms of production and export, the electronic industry in India is making remarkable growth. On the other hand, software development and IT-enabled services (ITeS) has roved India in a remarkable position in the globe.
With more than one-third of the population today using a smartphone or other advance electronics, electronics manufacturing in India becomes pivotal. Ajay Prakash Sawhney, electronics and IT Secretary shared that the exports of electronic products will grow in the range of 40-50 per cent annually over the next five years. And also Ravi Shankar Prasad, Union Minister mentioned that PLI schemes are going to create around 12 lakh jobs, 3 lakh direct and 9 lakh indirect employment opportunities in the country. These are certainly seen as the silver lining spurring electronics manufacturing in India. The question still remains as a phrase that “Where is the silicon”?
Perhaps, according to a report by the Indian Brand Equity Foundation (IBEF), Information Technology and Business process management (IT-BPM) industry revenue grew 7% y-o-y to reach US$ 191 billion in FY20 and is estimated to grow to US$ 350 billion by 2025. Moreover, revenue from the digital segment is expected to account for 38% of the total industry revenue by 2025. The digital economy is estimated to reach US$ 1 trillion by 2025.
Every state of India is taking numbers of initiatives to fulfil the dream of Make in India. There this collective approach is certainly giving a new area of opportunities for businesses and seekers to manufacture electronics in India.
- The Indian government has recently announced Rs 7,325-crore PLI for domestic manufacturers of laptops, tablets, personal computers and servers for four years.
“The aim of this scheme is to achieve global champions to India and to make national champions out of local manufacturers,” said Union Minister Ravi Shankar Prasad.
This PLI scheme may get production of Rs 3.26 lakh crore and exports of Rs 2.45 lakh crore over the next four years, and also provide 1.80 lakh job opportunities.
- In order to create electronic manufacturing clusters in India, the government has announced 19 EMCs, in which three of them have been allotted to the Andhra government. While appreciating the strength of Andhra Pradesh, Ravi Shankar Prasad says, that Andhra always comes on number one for doing any promotion and attracting investments for electronics manufacturing in India. “Some renowned companies like Dixon, Foxconn, Wingtech, Voltas, TCL, Sunny Opotech, etc. have either set up their facilities and in the advanced stage of project implementation for a variety of electronic products and components,” he added.
What is EMC?
The electronic ministry had initiated the Electronics Manufacturing Clusters (EMC) Scheme in October 2012 for attracting investments in the Electronics Systems Design and Manufacturing (ESDM) sector. This scheme provides help to set up Greenfield and Brownfield EMCs across the country. In 2019, the government also announced the Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme and the focus of this initiative is to create basic infrastructure, amenities and other common facilities for the ESDM sector.
- While seeing these developments, foreign companies are also taking an interest to participate in the campaign and for pushing this ‘Atmanirbhar’ initiative, Amazon has announced to start Electronic Devices manufacturing in India, which will be set up in Chennai.
- Recent announced budget 2021-22 has also come with lots of surprises. It announced the higher import duty rates on over a dozen handset and automobile components. Not only that, major electronic equipment like printed circuit board assembly, camera module and connectors will now attract 2.5 per cent duty.
- Grene Robotics and Bharat Electronics Limited (BEL) signed a partnership agreement to develop an Autonomous MANPAD Data Link (ADML) system, a first-of-its-kind air defence solution.
- Tata Group has also signed a collaboration with the Tamil Nadu government and the plan is to set up plants for manufacturing mobile components. The investment plan if of Rs 4,684 crore that will give employment almost 18,250 people.
- Taiwanese electronics manufacturing company, Pegatron has also announced an investment of Rs 1,100 crore and signed the deal with Tamil Nadu Government.
- Lam Research, which provides sophisticated equipment to global semiconductor players, has planned to invest in a new lab in Bengaluru. The new lab, which is likely to be operational by next year, will be used to expand the scope of hardware and software engineering for the company.
- In order to establish an electronics city in UP, a 700-acre land near Noida International Airport in Jewar has been selected by the Uttar Pradesh government.
Why Electronics Manufacturing in India is Pivotal?
The covid pandemic has proved to bring on the worst times for businesses and sectors. Perhaps, in these pandemic times technology and at large electronics came as a saviour. Helping every sector revive and fast cope-up, electronics churned new dimensions for businesses. Now, the Indian government is fully dedicated to manufacturing electronic components in India.
In the year 2020, the government initiated three major schemes to encourage domestic manufacturing. These are the Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing, the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and the Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme. The schemes are under the budget of Rs 50,000 crores (~$6.65 billion).
The government had also announced an Expression of Interest (EoI) last year for setting up/expansion of existing semiconductor wafer/ device fabrication (FAB) facilities in the country or even the acquisition of semiconductor FABs outside India. According to the National Policy on Electronics 2019 (NPE 2019), this FAB facility can make India as a global hub of Electronics System Design and Manufacturing (ESDM).
What is PLI Scheme?
Production-Linked Incentive or PLI scheme has been launched to attract foreign companies to establish its units in India and local companies to set up or expand existing manufacturing units and also to make more employment and cut down the country’s reliance on imports from other countries.
On April 1, 2020, the Indian government has initiated a scheme to provide 4-6% incentives to electronics companies that manufacture mobile phones and other electronic components such as transistors, diodes, thyristors, resistors, capacitors and nano-electronic components such as microelectromechanical systems.