Road ahead for boosting electronics manufacturing in India
The Indian electronics market, which was estimated to be around $75 billion last year, is now expected to grow by 6-7% annually for the next six years. This was not the case if one were to assess the situation two years ago. There was a definite dent in manufacturing plants being shut and demands lowering.
However, just like everything gets better with time, so did the electronics industry. The best lesson we all learned from the pandemic was that we need to have in-house manufacturing units. Due to the pandemic and trade being shut, several manufacturers and retailers found it hard to keep up with demand. For instance, semiconductors and panels were so scarce in India that the television industry had months of backlog as parts were not available.
But not anymore. Due to several PLI schemes and the Make-in-India initiative, several plants are being set up for end-to-end manufacturing in India. The Electronics Development Fund policy and the Modified Special Incentive Package Scheme have been introduced to promote manufacturing.
Apart from COVID, there are several reasons behind the increased production in the consumer electronics segment. Global shift in trade policies, the Russia war, work-from-home for corporates, revenge spending, and the US-China face-off, combined together, gave a platform to Indian electronics manufacturers to cater to not just India’s needs but also to global manufacturing needs.
How does the road ahead look like?
Increased demand leading to higher production
There is a sudden surge in demand for computers, phones, TV, and kitchen appliances, which is giving a push to manufacturing in India. In a population of 1.3 billion, only 600 million have a smartphone; so there is always scope for new acquisitions and, of course, upgrades in existing ones.
People are buying more consumer electronic products
People now want a better, easy and comfortable lifestyle. With rapid urbanisation, money to spend (increased disposable income), people are spending more on household appliances and definitely mobile phones. Hence, manufacturers certainly have a bright future.
International electronics brands are entering the Indian market
Seeing the huge potential in India, several popular international brands are entering the market. Thus, Indian manufacturers and retailers have a huge opportunity in front of them to partner with these brands and use their technology and brand name with in-house manufacturing.
The union government has exempted taxes on certain components and parts to promote manufacturing in India. Apart from these, there are export incentives and reduced custom duties on raw material import. Several other measures have been taken to give the Make-in-India plan a boost and promote the manufacturing of electronic items which were earlier imported from other countries and assembled in India.
The transition to 5G, the introduction of artificial intelligence, and the rollout of IoT are definitely driving the demand, as people increasingly adapt to technology. While everything is still in the initial phase, the transition is quick. Hence, Indian manufacturers who enter the segment will definitely gain an advantage.
From the above-mentioned factors, it is clear that, as a country, we should definitely not be dependent on others for finished goods. This is an opportunity of a lifetime, which Indian electronics manufacturers need to grab and step up their game. The entire industry has seen drastic changes due to the constantly changing demands across segments and technologies. The key idea is to keep evolving and innovating as per the consumer and market demands.