Centre on Asia and Globalisation | Confronting Trade-offs for India’s Electronics Manufacturing Success

The improving performance of India’s electronics manufacturing sector has been a topic of intense policy interest in the country. Electronics exports saw a spectacular growth of almost 50 percent in FY23, reaching $25.3 billion. Electronics is now India’s sixth largest merchandise export, overtaking readymade garments. Encouraged by these successes, the Indian government is confident of achieving its target of $140 billion in electronics exports and 1 million new jobs by FY26. This sector’s success is now portrayed as a vindication of the Indian government’s flagship industrial policy instrument: the Production Linked Incentive (PLI) scheme. Policy debates surrounding the PLI have primarily focused on its design, effectiveness, and potential pitfalls. But the elephant in the room is the crucial role of Chinese companies in India’s electronics manufacturing story. Read the full article here.

The Roadmap To India’s $300 Billion Electronics Manufacturing Dream

On January 24, the Minister for Electronics and Information Technology, Ashwini Vaishnaw released the vision document on the opportunities and growth of domestic electronics manufacturing. The report was a collaboration with the Indian Cellular and Electronics Association (ICEA) for developing a roadmap to increase and improve the share of India’s electronics exports in the next five years. While the first volume, titled “Increasing India’s Electronics Exports and Share in GVCs”, was released in November 2021, the second volume of the vision document came out this month.

Industrial Policies Alone Cannot Give Desired Results in Tech Sector

The India Cellular and Electronics Industry (ICEA) recently released a report detailing the effects of import tariffs on the domestic electronics industry. Currently, India’s import tariff rate for electronic and technology goods is much more than those of competing countries like China and Vietnam. This has been on the back of the recently announced 76,000 crore package to build the Indian semiconductor industry. But high import tariffs, trade restrictions, and taxation meant as protectionist measures decline the competitiveness of Indian goods in the global market. More importantly, it completely negates the effect of industrial policy measures which are meant to be supportive and business-friendly like the production linked incentive (PLI) scheme.