India’s electronics manufacturing sector is expected to grow by 15% to reach a value of USD 115 billion in 2024, with stakeholders continuing to focus on higher levels of value addition in terms of components and product development .
Production of mobile phones, the country’s flagship electronics manufacturer, is expected to exceed $50 billion by March 2024, up from about $42 billion in the previous fiscal year.
Google’s Pixel smartphones will be produced in India from the first quarter of 2024, completing the manufacturing base for all major global companies in the country.
Pankaj Mohindru, Chairman, Indian Cellular Electronics Association (ICEA), said that the total production value of electronic products in 2023-24 is estimated to be over $50 billion, supported by the exceptional contribution of mobile phones, to $115 billion. It is estimated that this will reach . This season.
Domestic electronics manufacturing has increased more than fourfold, according to data shared by the government. INR8.22 billion or USD 102 billion in the last 10 years INR180,454 million (US$29.8 billion) in fiscal year 2014.
Mohindru said mobile phone exports in FY24 are expected to be $15 billion, registering a 35% growth over the previous year.
According to ICEA estimates, mobile phone exports exceeded $9 billion in the April-November period of this fiscal year, compared to $6.2 billion in the same period last year.
While the local electronics manufacturing industry continues to grow in terms of value and volume, former central bank chairman Raghuram Rajan has sparked a debate by questioning the level of value addition taking place in the country.
Rajan’s remarks drew criticism from Union ministers Ashwini Vaishnau and Rajeev Chandrasekhar.
In a veiled attack on Rajan, Vaishnau said he has joined the opposition and the industry is ignoring opposition criticism by achieving new heights in manufacturing complex technological products.
He also said that local value addition in many electronic products has increased to up to 60 per cent and predicted that India would become an important component exporter in the next three to four years.
Mohindru said that by focusing on deep manufacturing and higher localization, the mobile phone industry will also achieve near-self-reliance in areas such as PCBAs (printed circuit board assemblies), chargers, battery packs, and cables. said that it was completed. others.
In the race to build a semiconductor ecosystem, the government is investing 70% of its finances in a $2.75 billion project by Micron, a global memory chip maker, to build a memory chip module assembly and test factory in the country. We were able to make our first breakthrough by establishing a company. Support from the government.
However, the sudden dissolution of Vedanta and Foxconn’s joint venture for a semiconductor factory project was unexpected.
The two companies are currently working on establishing semiconductor factories separately.
According to an official statement, Tata Electronics, Foxconn and HCL Group have submitted applications to set up chip factories. Chips are the most expensive and critical components needed to manufacture modern electronic devices.
Ankh Jain, managing director of fabless chipset company MediaTek India, said the company is focused on chipset design and when a semiconductor factory is set up, local manufacturing will be done depending on the business case. The company said it would consider options to procure new chipsets.
“Overall, we are bullish on the whole ecosystem being built in India. Going forward, more and more building blocks of this puzzle will come from India,” Jain said.
Electronics industry association ELCINA estimates that India’s electronics manufacturing base is worth more than $11 billion and demand is more than $40 billion.
ELCINA Secretary General Raju Goel said India needs special plans for the remaining components to complete the ecosystem.
“PLI (Production Linked Incentive) schemes announced so far to support component manufacturing have not been successful as they were not designed for value-added manufacturing. “In equipment manufacturing, where primarily assembly, testing and packaging operations, this ratio is 1:10 or higher,” he said. Ta.
Faisal Kawoosa, principal analyst at consulting firm Techarc, said the value added of mobile devices has gone up to as much as 28%, up from 5-6% previously, and there is a need to boost the design of Indian products to increase value added. He said there is.
According to GX Telecom, a beneficiary of the Telecom PLI scheme, the Indian industry is focused on localization and some components and PCBA designs are already produced in India.
“We are increasing our investment plan by $60 million to ensure localization of our value chain ( INR500 million USD), driven by surging demand in the domestic market and emerging technology trends, said Paritosh Prajapati, CEO of GX Group.
Rajkumar Upadhyay, CEO of state-owned telecommunications research arm Center for Development of Telematics (C-DoT), said the centre’s efforts to promote local product development and design are now bearing fruit. said.
He said the government is supporting several start-ups through the Telecommunications Technology Development Fund, which are currently contributing to the development of 4G, 5G and even 6G technologies in the country.
The electronics manufacturing services sector also hit new highs that year, with the presence of domestic companies such as Dixon Technologies, Silma SGS Technology, and Optimus Electronics further increasing, and previously foreign EMS companies such as Foxconn and Flex. It was exclusive.
A. Gururaj, Managing Director, Optimus Electronics, said the electronics manufacturing sector will further accelerate and gain momentum in 2024.
“We are constantly looking at ways to increase the localization of components and processes when manufacturing electronics products in India.Currently, the localization rate for hardware bill of materials is 20%. , we aim to increase this to 45% in India ‘next year,’ he said.