India's electronics manufacturing sector is set to undergo a remarkable transformation, with experts predicting an impressive 15% growth rate. This surge is expected to increase the industry's value to a staggering $115 billion by 2024, positioning India as a global hub for manufacturing electronic devices and components.
The exponential growth in mobile phone exports is a key factor driving this impressive growth, projected to reach an astounding $15 billion by FY24. India's mobile phone industry has become nearly self-sufficient in producing crucial components like PCBAs, chargers, battery packs, and cables. This shift towards domestic manufacturing has significantly increased the value added to mobile devices, rising from a mere 5-6% to an impressive 28%.
While the industry has made significant progress, concerns have been raised about the level of value added. Former RBI Chairman Raghuram Rajan sparked a debate by questioning whether India's electronics manufacturing sector genuinely adds substantial value to its products. Despite the progress made, there is still room for improvement to enhance the overall value chain.
Chips, being the most expensive and vital component in modern electronic devices, play a crucial role in the sector's growth. Unfortunately, the Vedanta-Foxconn joint venture aimed at establishing a semiconductor plant unexpectedly dissolved, leaving a gap in local chip manufacturing. However, there is hope on the horizon as Tata Electronics, Foxconn, and HCL Group have applied to set up chip plants, indicating a potential revival in the semiconductor industry.
To achieve self-sufficiency and complete the ecosystem, India needs a special scheme to address the manufacturing of other essential components. Recognizing this need, the government is actively working to secure investments and collaborations. Recently, Micron secured a $2.75 billion project to establish an assembly and test plant for memory chip modules, further strengthening India's position in the global electronics market.
India's electronics industry prospects go beyond domestic production. MediaTek India's Managing Director has expressed interest in sourcing locally-made chipsets once the semiconductor plants are established. This move would not only boost the local chip manufacturing sector but also position India as a significant exporter of electronic components in the future.
In a significant development, Google has announced its plans to start Pixel smartphone production in India from Q1 2024. This move will complete the manufacturing presence of major global players in the country, further solidifying India's position as an electronics manufacturing powerhouse.
Beyond manufacturing, there is a growing emphasis on design in Indian products to enhance value addition. With the domestic electronics manufacturing industry witnessing a four-fold increase to Rs 8.22 lakh crore or $102 billion over the last decade, there is an opportunity to leverage this growth by focusing on innovative and indigenous designs.
Mobile phone production is expected to exceed $50 billion by March 2024, while overall electronic goods production is estimated to reach an astonishing $115 billion in FY 2023-24. Such exponential growth not only demonstrates the potential of the Indian electronics industry but also highlights its significant contribution to the country's economy.
As India's electronics manufacturing sector continues to expand, it is crucial to address challenges and seize opportunities. With increased investment, collaborations, and a focus on value addition and design, India is set to become a global leader in electronics manufacturing, propelling the nation into a new era of technological prowess. The stage is set for India to revolutionize the electronics industry and solidify its position on the world stage.
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