India is preparing to launch a new incentive program worth up to $5 billion aimed at encouraging companies to produce electronic components domestically. This initiative, backed by the Ministry of Electronics and Information Technology, focuses on manufacturing parts for various electronic products, from mobile phones to laptops. This move is part of a broader strategy for India to strengthen its electronics industry and reduce dependence on imports from China.
Indian government officials have indicated that the upcoming plan could offer between $4 billion and $5 billion in rewards. Both global and local companies that meet certain criteria will be able to benefit from these incentives. The program is expected to be officially launched in the next two to three months.
Currently, the plan is in its final stages of formulation, with specific components identified as eligible for these rewards. The Indian Ministry of Finance is expected to approve the final budget allocation for the plan soon, ensuring that the project proceeds as scheduled. Once approved, the initiative aims to kickstart local manufacturing of electronic components, significantly enhancing India's position in this critical industry.
Officials stated that the new program will incentivize the production of key components such as printed circuit boards (PCBs), which will increase domestic value addition and deepen the local supply chain for a range of electronic products.
Since Prime Minister Modi took office a decade ago, India has been encouraging electronics manufacturers to invest in the country through a "carrot and stick" policy. Key initiatives include the Production-Linked Incentive (PLI) scheme for 14 sectors, which provides financial incentives to boost production, with a focus on mobile devices, semiconductors, and electronic components.
Additionally, the Electronics Manufacturing Clusters (EMC 2.0) program supports infrastructure development to create industry-specific clusters. The Semiconductors and Electronics Components Manufacturing Promotion Scheme (SPECS) offers capital subsidies for establishing component and semiconductor production facilities, complementing the government's broader "Make in India" agenda.
According to data from the Ministry of Electronics and Information Technology, domestic production of electronic products in India has surged, increasing from 3.88 trillion Indian Rupees (approximately $60 billion) in the 2018 fiscal year (April 2017 to March 2018) to 8.22 trillion Indian Rupees (approximately $101 billion) in the 2023 fiscal year, with a compound annual growth rate (CAGR) of 16.19%.
The Indian government's top policy think tank, Niti Aayog, states that India aims to expand the value of its electronics manufacturing sector to $500 billion by the 2030 fiscal year, including the production of components valued at $150 billion.
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Source: Aijiwei
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