Electronics Manufacturing Sector To Be Worth $115 Billion In 2024

NEW DELHI: India’s electronics manufacturing sector is set to grow 15 per cent to be worth USD 115 billion in 2024, with players continuing to focus more on higher levels of value addition in terms of components and development of products.

The production of mobile phones, the poster boy of the country’s electronics manufacturing, is expected to surpass USD 50 billion by March 2024 from around USD 42 billion in the previous financial year.

Google’s Pixel smartphone production in India from the first quarter of 2024 will complete the manufacturing presence of all global majors in the country.

India Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo said the total production of electronic goods in the financial year 2023-24 is estimated to reach USD 115 billion, buoyed by an exceptional contribution of mobile phones, which is estimated to exceed USD 50 billion in the current fiscal.

According to data shared by the government, domestic electronics manufacturing increased over four-fold to Rs 8.22 lakh crore or USD 102 billion in the last 10 years from Rs 1,80,454 crore (USD 29.8 billion) in FY14.

Mohindroo said the mobile phone exports are expected at USD 15 billion in FY24, posting a 35 per cent growth over the last fiscal.

ICEA estimates that mobile phone exports have surpassed USD 9 billion during the April-November period of this fiscal compared to USD 6.2 billion during the same period last year.

While indigenous electronics manufacturing has been growing in terms of value and volume, former RBI Chairman Raghuram Rajan triggered a debate by questioning the level of value addition taking place in the country.

Rajan’s remark attracted criticism from Union ministers Ashwini Vaishnaw and Rajeev Chandrasekhar.

Vaishnaw, in a veiled attack on Rajan, had said that he has joined the opposition and the industry has ignored the criticism of the opposition by achieving new heights in manufacturing complex technology products.

He also said that local value addition in many electronics products has increased to up to 60 per cent and projected that India will become a significant component exporter in the next three to four years.

With a strong focus on deep manufacturing and a greater degree of localisation, Mohindroo said the mobile phone industry has also been able to achieve a state of near self-reliance in PCBAs (Printed Circuit Boards Assembly), chargers, battery packs and cables, among others.

In its race to build a semiconductor ecosystem, the government was able to get its first breakthrough with a USD 2.75 billion project by global memory chip maker Micron to set up an assembly and test plant for memory chip modules in the country with 70 per cent fiscal support from the government.

However, the sudden break up of the Vedanta-Foxconn joint venture for a proposed semiconductor plant was unexpected.

Now, both entities are separately working to set up a semiconductor plant.

According to official announcements, Tata Electronics, Foxconn and HCL Group have submitted applications to set up chip plants. Chips are the most expensive and key component required for making modern electronic devices. Fabless chipset company MediaTek India’s Managing Director Anku Jain said that his company is into designing chipsets and it will explore options to source locally-made chipsets, depending on the business case, when semiconductor plants are established.

“Overall, we are bullish about the whole ecosystem being set up in India. Going forward, more and more components of this puzzle will come from India,” Jain said.

Electronics components players body ELCINA estimates the electronics component manufacturing base in India is valued at over USD 11 billion while demand is in excess of USD 40 billion.

ELCINA Secretary General Rajoo Goel said India needs a special scheme for the rest of the components to complete the ecosystem.

With inputs from PTI.

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