Electronics Manufacturing Will Get More Speed in India, Government to Offer Up to USD 5 Billion in Incentives

Electronics manufacturing has increased in India in the last few years. The central government has planned to give incentives worth five billion dollars (about Rs 42,221 crore) to companies in this sector for local manufacturing of components from laptops to smartphones. This will reduce the supply from China.

In the last six years, electronics manufacturing in the country has more than doubled to about $115 billion. In this, the growth in manufacturing of smartphones by American devices maker Apple and South Korea’s Samsung has contributed significantly. India has become the fourth largest supplier of smartphones in the world. However, components imported from China are used extensively in the manufacturing of smartphones. A government official with knowledge of the matter said, “The new scheme will boost manufacturing of critical components like printed circuit boards.”

This scheme Can be launched in two to three months. In this, incentives worth four-five billion dollars will be offered to eligible Indian or international companies. This scheme has been prepared by the Electronics Ministry. The ministry has also identified components for this. The Finance Ministry and the Electronics Ministry did not respond to requests for comment. Government think tank NITI Aayog has said that the target is to increase the manufacturing of electronics to about 500 billion dollars by 2030. This involves manufacturing of components worth approximately $150 billion.

In the last financial year, more than $89 billion of electronics, telecom equipment and electrical products were imported into the country. More than half of these imports were from China and Hong Kong. Apple has prepared to reduce its dependence on China for the manufacturing of iPhone. For this, the company plans to create its own supply chain in India. For the last few years, Apple has worked on shifting some part of its manufacturing in China to other countries. In the last financial year in the country, the company’s revenue increased by almost 36 percent to more than Rs 67,121 crore. iPhones have a major share in Apple’s sales.