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India is set to launch a new scheme offering up to $5 billion in incentives to companies that manufacture key electronic components locally. This initiative, aimed at reducing the country’s reliance on China for electronics supplies, comes as India’s electronics production has more than doubled over the past six years, reaching an impressive $115 billion in 2024. The scheme is expected to be unveiled in the next two to three months.
India has become the world’s fourth-largest smartphone supplier, thanks to significant growth in mobile manufacturing led by global companies such as Apple and Samsung. However, despite this success, the sector remains heavily dependent on imported components, particularly from China. The new incentive scheme is designed to address this issue by promoting domestic production of crucial components, including printed circuit boards (PCBs), which are essential for gadgets like mobiles, laptops, and other electronics.
According to government officials, the incentives will help enhance local value addition and strengthen domestic supply chains for various electronic products. These measures are seen as critical in fostering a self-reliant electronics industry and mitigating the risks associated with overdependence on foreign imports, especially from China.
The scheme, which is being finalized by India’s Ministry of Electronics, is expected to offer incentives ranging between $4 billion and $5 billion to both global and local companies that meet the criteria. The government aims to boost the domestic manufacturing capacity of electronic components, which are critical to India’s broader goal of expanding its electronics industry to $500 billion by 2030. This expansion includes a target of producing $150 billion worth of components within the same time frame, as per India’s policy think tank, Niti Aayog.
India’s electronics industry has seen a significant rise in domestic manufacturing, but it still faces challenges in reducing its dependency on imports. In the fiscal year 2024, India imported electronics and telecom equipment worth nearly $89.8 billion, with more than half of these imports coming from China and Hong Kong, according to data from the Global Trade Research Initiative (GTRI).
Industry leaders, including Pankaj Mohindroo, head of India’s Cellular and Electronics Association, have stressed the importance of the new scheme in furthering the country’s ambition to scale up its electronics production. “Component manufacturing is crucial for India to achieve global-scale electronics production, and this scheme will help us move towards that goal,” Mohindroo said.
The launch of this incentive scheme is expected to support India’s drive towards becoming a manufacturing hub for electronics, reduce its trade deficit in the electronics sector, and create numerous jobs in the process.
As the scheme’s final details are being ironed out, the Indian government’s push to promote local electronics manufacturing is seen as a step towards a more self-sufficient and resilient economy, which could reduce vulnerabilities stemming from reliance on global supply chains dominated by China.
Sources By Agencies
