Business

India To Roll Out $5 Billion Incentive Scheme For Electronics Manufacturing

India is set to launch a new incentive scheme worth up to $5 billion aimed at local electronics manufacturers, according to government officials. The initiative seeks to promote the production of critical components for devices such as smartphones, laptops, and other electronics, with the goal of reducing reliance on Chinese imports and bolstering domestic supply chains.

Electronics Industry Growth And Import Dependency

India’s electronics production has seen remarkable growth, reaching $115 billion in 2024, more than double its output from just six years ago. Global giants like Apple and Samsung have driven the country’s ascent as the fourth-largest smartphone supplier globally. However, despite this success, the industry remains heavily dependent on imported components, particularly from China and Hong Kong. These imports accounted for over half of India’s $89.8 billion electronics imports in the fiscal year 2024, according to the Global Trade Research Initiative (GTRI).

Key Focus Areas Of The Incentive Scheme

The new scheme, spearheaded by India’s Ministry of Electronics, will offer incentives to local manufacturers to produce vital components like printed circuit boards. Officials say the scheme is design to enhance domestic value addition and foster deeper local supply chains. These measures are part of a broader strategy to make India more self-sufficient in electronics manufacturing while advancing its ambitions to become a global manufacturing hub.

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The Ministry of Finance is expected to approve the program, and it will be announced within the next two to three months. The details of the scheme remain confidential at this stage, as government officials have requested anonymity.

Long-Term Goals And Industry Support

India’s ambitions in the electronics sector are significant. The government has set an ambitious target of scaling up production to $500 billion by 2030, including $150 billion from component manufacturing alone, as outlined by the government think tank, Niti Aayog.

Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association, emphasized the importance of the new scheme, stating, “This scheme is timely as it will encourage component production, enabling India to achieve global-scale electronics manufacturing.”

Reducing Import Dependency And Strengthening Global Position

Many see the new initiative as a crucial step in advancing India’s goal of reducing its dependency on electronics imports, particularly from China, and positioning India as a major player in the global electronics market. Although neither the Ministry of Electronics nor the Ministry of Finance has officially commented on the matter, industry experts view the plan as an important move toward strengthening India’s manufacturing capabilities.

As global economic and geopolitical shifts continue to influence trade dynamics, India’s efforts to enhance its electronics production could play a pivotal role in reshaping its role in the international market.

Richa Kaushik

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