India's Electronics Production to Hit 90 Percent by FY27
India is enhancing its status as a worldwide manufacturing center, with value addition in electronics production rising from 30 percent to approximately 70 percent, and is expected to hit 90 percent by FY27, according to Axis Capital report.
Under a new components policy, the nation aims to boost value addition from the present 15-16 percent to 40-50 percent. Mobile phone exports have increased by 77 times over the past decade.
India has reduced its imports of completely assembled air conditioners (CBUs) from 35 percent in FY19 to merely 5 percent in FY25. Essential components such as compressors, copper tubing, and aluminium coils are currently being produced in India.
In FY24, approximately 8.5 million RAC compressors were brought in, but in the next 2-3 years, it's anticipated that all of them will be produced domestically.
The need for Printed Circuit Board Assembly (PCBA) has surged in both commercial and consumer markets, aided by increased import tariffs.
Until 2016, India brought in more electronics than it manufactured. However, circumstances have shifted. Due to the "Make in India" initiative, domestic manufacturing is currently around 24 percent greater than imports (as of FY24).
Electronics exports are increasing rapidly, showing a compound annual growth rate (CAGR) of approximately 26 percent from FY16 to FY25.
Imports of mobile PCBAs, valued at approximately Rs 300 billion in FY18, have fallen to almost zero in FY24. With updated policies implemented, India is now advancing toward producing more PCBs and additional electronic components domestically.
India is swiftly emerging as a leading option for international electronics production and exports. Due to encouraging government initiatives such as the Production Linked Incentive (PLI), Phased Manufacturing Program (PMP), and the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), combined with a proficient workforce and advancing infrastructure, the nation is making progress in the international supply chain.
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To entice manufacturers, the government has lowered the corporate tax rate to merely 15 percent for new manufacturing facilities. With the global "China +1" strategy and simplified export procedures, India is now regarded as a robust alternative for international firms.