On Saturday, the government announced its intention to introduce a new initiative aimed at promoting the domestic manufacturing of mobile phones, electronic equipment, and semiconductor packaging. The objective is to integrate India into the global manufacturing chain and bolster employment opportunities. Finance Minister Nirmala Sitharaman, during the presentation of the Budget for 2020-21, expressed plans for a focused scheme on the mentioned sectors, emphasizing that the specifics would be disclosed soon. She highlighted the adaptability of this scheme for the manufacturing of medical devices as well.
Sitharaman stressed the importance of India manufacturing networked products to become an integral part of the global value chain. By doing so, the country would attract more investments, subsequently generating employment opportunities for the youth. The Finance Minister acknowledged the competitiveness of the electronics manufacturing industry, citing India’s demonstrated cost advantage.
Emphasizing the immense potential for job creation in this sector, Sitharaman urged the need for boosting domestic manufacturing and attracting substantial investments in the electronics value chain. President Ram Nath Kovind had previously noted that India has become the second-largest global hub for mobile phone manufacturing, with the value of electronic equipment manufactured in the country increasing to Rs 4.58 lakh crore in 2018-19 from Rs 1.90 lakh crore in 2014-15.
In alignment with the government’s overarching goal to establish India as a global manufacturing base, there is a target to promote domestic manufacturing throughout the entire value chain of Electronic System Design and Manufacturing (ESDM) to achieve a turnover of $400 billion (Rs 26 lakh crore) by 2025. Specifically, for the mobile handset segment, the National Policy on Electronics 2019 sets a target of producing 100 crore mobile handsets domestically by 2025, valued at about Rs 13 lakh crore. Out of this, 60 crore units are designated for exports, valued at approximately Rs 7 lakh crore.
According to the Indian Cellular and Electronics Association (ICEA), mobile handset exports witnessed an eight-fold increase to Rs 11,200 crore in 2018-19, surpassing imports for the first time. This underscores the government’s commitment to advancing India’s position in global manufacturing and fostering a self-reliant ecosystem in the electronics industry.