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2024-12-08
India’s Electronics Industry Aims for Self-Reliance
The Electronics Industries Association of India (ELCINA) has proposed a significant Rs 72,500 crore (USD 8.57 billion) support package to the Indian government. This substantial investment is aimed at bolstering domestic production of electronic components and reducing the nation’s reliance on imports.
The Growing Demand-Supply Gap
ELCINA estimates that the demand-supply gap for electronic components will widen to a staggering USD 248 billion by 2030. This shortfall is primarily attributed to the projected USD 500 billion electronics production target. To bridge this gap, India heavily relies on imports.
Government Support and Industry Expectations
The industry body believes that targeted government support for non-semiconductor components can significantly alleviate this deficit. By reducing the gap to USD 102 billion, India can make substantial strides towards self-reliance.
ELCINA Secretary General Rajoo Goel highlighted the unique challenges faced by electronic component manufacturers. Unlike finished products, component factories typically generate lower returns on investment, incur higher operational costs, and have longer gestation periods. To address these hurdles, the industry body has requested a comprehensive support package that includes:
Capex Support: A USD 2.14 billion allocation to encourage expansion and modernization of manufacturing facilities.
Production-Linked Incentive (PLI) Scheme: A USD 6.43 billion PLI scheme to incentivize domestic production and reduce costs.
The Focus on Non-Semiconductor Components
ELCINA’s proposal primarily focuses on non-semiconductor components, which constitute a significant portion of the total cost of an electronic product. These components include miniature electronic components, printed circuit boards, discreet semiconductors, active components, and metallic components.
Job Creation and Economic Impact
By boosting domestic production of non-semiconductor components, India can create an additional 50 lakh jobs by 2030. This labor-intensive sector has the potential to attract substantial foreign direct investment, further stimulating economic growth.
The Road Ahead
The Indian
What Undercode Says:
ELCINA’s proposal is a strategic move to address India’s growing reliance on imported electronic components. By providing targeted support to the non-semiconductor component industry, the government can stimulate domestic manufacturing, create jobs, and boost economic growth.
However, it’s crucial to consider the long-term implications of such a policy. While short-term incentives can accelerate growth, it’s essential to foster a sustainable ecosystem that encourages innovation, research and development, and technological advancements.
To achieve long-term self-reliance, India needs to focus on building a strong domestic supply chain, developing skilled workforce, and attracting investments in cutting-edge technologies. By adopting a comprehensive approach that combines fiscal incentives, regulatory reforms, and industry partnerships, India can position itself as a global leader in electronics manufacturing.
References:
Reported By: Timesofindia.indiatimes.com
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