On July 18, 2024, the National Institution for Transforming India (NITI) Aayog released the report titled “Electronics: Powering India’s Participation in Global Value Chains(GVC)“. This report provides an in-depth analysis of India’s electronics sector, highlighting its potential and challenges, and outlines a roadmap for India to become a global manufacturing hub in electronics.
- Market Size: The global electronics market is valued at USD 4.3 trillion, dominated by China, Taiwan, the USA (United States of America), South Korea, Vietnam, and Malaysia.
- India’s Share: Despite a 4% share in global demand, India’s exports are approximately USD 25 billion annually, representing less than 1% of the global market share.
Highlights – Indian Scenario:
i.Ambitious Target: India should aims for USD 500 billion in electronics manufacturing by FY30, creating 5.5 to 6 million jobs, with electronics exports expected to hit USD 240 billion and domestic value addition exceeding 35%.
- This target should comprise USD350 billion from finished goods manufacturing and USD150 billion from components manufacturing.
ii.Export Performance: In FY23, India’s electronics sector contributed 5.32% to the country’s total merchandise exports, showcasing its competitiveness and international demand.
iii.Production Growth: The electronics sector grew to USD 155 billion in FY23, nearly doubling from USD 48 billion in FY17, primarily driven by mobile phones, which make up 43% of total production.
- India now manufactures 99% of its smartphones domestically.
iv.Current Production Value: As of FY23, India’s electronics production stands at USD 101 billion, with USD 86 billion from finished goods and USD 15 billion from components manufacturing.
- Exports during this period totaled approximately USD 25 billion.
v.Future Projections (BAU Scenario): In a Business As Usual (BAU), by FY30, electronics manufacturing could reach USD 278 billion, with employment growing to around 3.4 million and exports reaching USD 111 billion.
vi.Global Value Chain Participation: 70% of international trade involves GVC items. Enhancing India’s GVC participation, particularly in electronics, semiconductors, automobiles, chemicals, and pharmaceuticals, is crucial.
- Notably, 75% of electronics exports are from GVCs.
Recommendations:
The report recommended Strategic Interventions by implementing fiscal, financial, regulatory, and infrastructure measures to support growth, including:
- Promoting components and capital goods manufacturing
- Incentivizing Research & Development(R & D) and design
- Rationalizing tariffs
- Initiating skilling programs
- Facilitating technology transfers
- Developing infrastructure to support the electronics manufacturing ecosystem
- Strategic partnerships with global technology leaders.
Recent Related News:
i.NITI Aayog launched the “AIM-ICDK Water Challenge 4.0” and the 5th edition of “Innovations for You” under its flagship program, Atal Innovation Mission (AIM).
ii.According to the official data released by NITI Aayog, the Government of India (GoI) has monetized assets worth Rs 1.56 lakh crore in Financial year 2023-2024 (FY24) as against the set target of Rs 1.8 lakh crore, under the National Monetisation Pipeline (NMP).
About National Institution for Transforming India (NITI) Aayog:
Chairman– Prime Minister (PM) of India (Currently Narendra Modi)
Vice Chairperson- Suman K Bery
Headquarters– New Delhi, Delhi
Establishment– 2015
