New Delhi, Oct 5 With the increasing focus of the government on domestic manufacturing of electronics components in the country, the electronics sector will see its contribution to GDP almost double in the next few years, industry experts estimate.
"With series of Govt interventions like PMP, SPECS and PLI, India is set to become the global hub for electronic products and with the economy of this size it is important for our country to have its own component manufacturing and echo system. This sector today contributes 3.4 per cent to GDP and is expected to contribute 6.4 per cent in next few years," Rajeev Khushu, Chairman, India Electronics and Semiconductor Association (IESA) said.
IESA is the key industry body representing the Electronics Systems Design and Manufacturing (ESDM) and intelligent electronics industry in India. Through its deep connection with its member companies, IESA aims to grow the ESDM and electronics business segment in India while making India the preferred destination for electronics and semiconductor design and manufacturing.
Over the last few years, the government has come out with a number of policies towards subsidising and incentivising the manufacture of critical electronics in the country. Currently, the electronics import bill for the India is the second highest after petroleum and petroleum products.
The government has released a number of policies towards significantly increasing India's domestic electronics manufacturing and is continually improving on these policies. These policies include the National Policy on Electronics (NPE) that sets the vision of making India a global hub of Electronics System Design and Manufacturing (ESDM), the Product Linked Incentive Scheme (PLI) and Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) that incentivises domestic manufacturing of electronics, among others.
As per data available from Invest India, the agency responsible for investment promotion in India, electronic component production has risen by as much as $4 billion from 2014 to 2018. While the global market for electronic components is expected to reach $191.8 billion by 2022, India's share in global electronics manufacturing has grown from 1.3 per cent in 2012 to 3.6 per cent in 2019. Growth in the Indian electronic componentts market is driven by rising domestic demand and a growing electronics ecosystem coupled with initiatives like 'Make in India' and 'Digital India'. This has resulted in the Indian Electronic Components Market increasing from $11 billion in the financial year 2009-10 to $20.8 billion in the financial year 2018-19, showing an annual growth rate of around 7 per cent.
"With the median age of India in twenties the consumption of electronics is growing at a CAGR of 15 per cent for next few decades and as a result we will leap into top 3 countries in the ESDM consumption and top 5 countries in electronics production," Khushu added.
Further, initiatives such as 'Digital India' and 'Smart City' projects have raised the demand for Internet of Things. The Indian electronics markets is considered one of the largest in the world and expected to hit $400 billion by 2025.
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