Brief Context
Context The Government of India has received 70 applications, 80% from small and medium enterprises (SMEs), for its Electronics Component Manufacturing Scheme. Government initiatives Make in India, Digital India, and Startup India are promoting domestic manufacturing and technological innovation. Production Linked Incentive Scheme (PLI): The scheme aims to attract large investments in the mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Pac
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Syllabus: GS3/ Science and Technology
Context
- The Government of India has received 70 applications, 80% from small and medium enterprises (SMEs), for its Electronics Component Manufacturing Scheme.
Electronics Component Manufacturing Scheme
- It is a Rs.22,919 crore scheme, aims to develop a robust component ecosystem by;
- Attracting large investments (global/domestic) in the electronics component manufacturing ecosystem,
- Increasing Domestic Value Addition (DVA) by developing capacity and capabilities, and
- Integrating Indian companies with Global Value Chains (GVCs).
- Salient Features of the Scheme:
- The scheme provides differentiated incentives to Indian manufacturers tailored to overcome specific disabilities for various categories of components and sub-assemblies so that they can acquire technological capabilities and achieve economies of scale.
- The tenure of the scheme is six years with one year of gestation period.
- Payout of a part of the incentive is linked with employment targets achievement.
Component Classification under the Scheme
- Category A: Display modules, camera module sub-assemblies.
- Category B: Bare components like non-surface mount devices, multi-layered PCBs, lithium-ion cells, IT hardware products.
- Category C: Flexible PCBs, SMD passive components.
- Category D: Capital goods and components used in manufacturing of A, B, and C.
Progress in India’s electronics sector
- The domestic production of electronic goods has increased from Rs.1.90 lakh crore in FY 2014-15 to Rs.9.52 lakh crore in FY 2023-24 at a CAGR of more than 17%.
- The exports of electronic goods have also increased from Rs.0.38 lakh crore in FY 2014-15 to Rs.2.41 lakh crore in FY 2023-24 at a CAGR of more than 20%.
Challenges in electronics sector
- Market Competition: The global electronics market is dominated by countries like China, Taiwan, USA, South Korea, Vietnam and Malaysia.
- Technical Skills: There is a lack of adequately trained technical personnel for advanced manufacturing processes.
- Capital Intensive industry: Electronic manufacturing is a complex and technology-intensive sector with huge capital investments, high risk, long gestation and payback periods, requiring significant and sustained investments.
Government initiatives
- Make in India, Digital India, and Startup India are promoting domestic manufacturing and technological innovation.
- Production Linked Incentive Scheme (PLI): The scheme aims to attract large investments in the mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units.
- National Policy on Electronics 2019 (NPE 2019): It is a comprehensive framework to develop India as a global hub for electronics manufacturing.
- Modified Electronics Manufacturing Clusters (EMC 2.0) develops infrastructure with common amenities and industrial clusters for electronics production.
Way Ahead
- India has set a target to achieve 500 billion USD in electronics manufacturing in value terms by 2030.
- To enhance competitiveness, India needs to localize high-tech components, strengthen design capabilities through R&D investments, and forge strategic partnerships with global technology leaders.
Source: TH