India is set to reach the general electronics production of $300 billion in FY26. According to data from the industry association India Cellular and Electronics Association (ICEA), electronics worth about $87 billion were produced locally in FY22, which is expected to grow to $100 billion in FY23.
Mobile phone export have already passed the $5 billion mark in the first seven months (April-October) of FY23, more than double the $2.2 billion India clocked in the same period last year, as Apple and Samsung pushed export. The development of an ecosystem for electronics manufacturing and the subsequent increase in exports are mainly driven by the production-related incentive (LAKE) schematics.
“In early 2021, we sat down with the industry and worked out this $300 billion roadmap,” Rajeev Chandrasekhar, state minister for electronics and IT, told ET.
Streamline processes
“One of the key things about the goal was to expand exports significantly to go from the current $18-20 billion to $120 billion in FY26. These mobile phone fiscal exports are expected to reach $9 billion,” said the minister.
In the $120 billion electronics exports targeted for FY26, mobile phones could account for $60 billion.
Electronics exports grew 54% to $10.2 billion in April-September, from $6.5 billion in FY22, according to industry data.
The minister said all states want to participate in the electronics manufacturing opportunity, which creates hundreds of thousands of jobs across the country. The participation of all states, he added, is required to make India an electronics manufacturing hub.
“What has happened now is that 66% of foreign direct investment (FDI) in electronics has been made in the last three years and almost every state is now competing to attract investment,” he said, adding that it is the frees up space for digital and electronic production. is one of the fastest job creators.
The central government liaises with all state governments regarding electronics manufacturing. Chandrasekhar has been meeting regularly with the IT ministers of all states to streamline processes and remove bottlenecks such as rewards.
The Rs 41,000 crore PLI plan for smartphone manufacturing started in 2020 and Tamil Nadu has emerged as a strong player in attracting companies like Foxconn and Pegatron, contract manufacturers for Apple, apart from Dell and Bharat FIH (another Foxconn unit). Karnataka is the base for another Apple contract maker, Wistron, while Samsung produces at its plant in Uttar Pradesh. Apart from these states, others including Gujarat and Maharashtra have pushed for electronic units.
After hitting a record $1 billion in September, mobile phone exports had marginally declined to about $900 million in October, due to slowdown in global markets, the officials said.
Buoyed by the plan to drive out electronics manufacturers, mainly from China and Vietnam, mobile phones have become the largest contributor to electronics exports. Driven by companies like Apple and Samsung, made in India devices are now shipping to countries such as the UK, the Netherlands, Austria and Italy, industry executives said. Earlier, Indian-made handsets were mainly exported to the Middle East, Africa and South Africa.
The success of the smartphone PLI program has prompted the government to launch similar programs in 14 sectors such as automobiles and auto parts, IT hardware, telecom equipment and design, pharmaceuticals, solar panels, metals and mining, textiles and apparel, white goods, drones and advanced chemical cell batteries.