Why Is This in the News?
Leading global smartphone manufacturers like Apple and Samsung have established production facilities in India, driven by a large talent pool, attractive government incentives, and the strategic need to diversify supply chains away from China.
Although India has made significant strides in localizing smartphone assembly, the government is now shifting its focus to increasing domestic value addition. This push includes the launch of focused subsidy programs such as the ₹76,000 crore India Semiconductor Mission and a ₹23,000 crore scheme to promote passive electronic components, in addition to the existing Production-Linked Incentive (PLI) schemes.
The overarching goals are to:
- Reduce dependency on imports—particularly from China
- Strengthen local manufacturing across all tiers of electronics
- Create high-quality employment opportunities
Currently, India’s local value addition stands at 15–20%, with plans to double it in the coming years (for comparison, China’s rate is 38%). This urgency is underscored by India’s record $100 billion trade deficit with China in FY 2024–25.
India’s Progress in Electronics Manufacturing Value Addition
Ambition to Boost Local Value Addition
The government’s new components policy aims to elevate domestic value addition in electronics from the current 15–16% to 40–50%, helping grow the sector and lower import dependence.
Massive Growth in Mobile Phone Exports
India’s mobile phone exports have skyrocketed—growing 77-fold over the past decade, reflecting its rising prominence in the global electronics landscape.
Strong Growth in Overall Electronics Exports
India’s electronics exports have maintained a healthy CAGR of 26% from FY16 to FY25, indicating a robust upward trajectory.
Reduced Import of Key Components
Imports of mobile phone PCBAs have fallen sharply from ₹30,000 crore in FY18 to nearly zero by FY24, thanks to increased domestic production.
India’s Status in Global Mobile Manufacturing
India has become the world’s second-largest mobile phone producer, with 99% of phones sold domestically now made locally.
Electronics Components Manufacturing Scheme
The Ministry of Electronics and IT recently rolled out a ₹22,919 crore incentive scheme to boost domestic manufacturing of electronic components, building upon earlier PLI schemes that focused primarily on final product assembly.
Targeting Component-Level Manufacturing
The six-year program supports domestic production of critical components like:
- Display modules
- Camera sub-assemblies
- Printed Circuit Boards (PCBs)
- Lithium cell enclosures
- Resistors, capacitors, and ferrites