Aatmanirbhar Bharat is giving wings to India’s aspirations. Adding wings to this aspiration can be the boosting of export-oriented local manufacturing of laptops and tablets, which can open up $100 billion opportunity for India by 2026, as per a joint report by India Cellular & Electronics Assocation (ICEA) and EY.
Currently China leads the pack of global manufacturing hubs for laptops and tablets, with 66 percent market share in 2019 worth $100 billion, the report mentioned.
“This presents an opportunity for India to ramp up the export of ‘Made in India’ laptops and tablets. By making in India for the world and obtain a sizable share of the global market will give us a manufacturing value of $100 billion by 2025,” ICEA Chairman Pankaj Mohindroo told reporters in a virtual conference. “It will also create five lakh additional jobs and a cumulative inflow of foreign exchange to the tune of $75 billion; and investment of over $1 billion,” Pankaj added.
In addition, the right policy interventions to boost laptop and tablet manufacturing in India would reduce the imports of targeted laptops from China. This will lead to reduced trade deficit and greater self-reliance, he further added.
The global market for laptops and tablets is expected to be nearly $220 billion per year over the next five years, while in India, the market size is estimated to continue to be around $7 billion for the same period. These devices fall under the category of Information Technology Agreement-I products, thus the Basic Customs Duty on their import is zero. Duties cannot be imposed on such imports as there are an inherent cost arbitrage and benefit to importing these devices as against their manufacturing in India.
Therefore unless exports are promoted, it is unlikely that the domestic market will offer an additional growth for companies aspiring to manufacture in India, the report said.
India’s import of laptops has increased by 42 percent – from $2.97 billion to $4.21 billion – in value terms, in the last five years, 87 percent of which continues to come from China.
For the year ending March 2021, India’s import of laptops is estimated to reach close to $5 billion, with $4.35 billion alone from China, as per the report. However, given the present geopolitical situation, India has a strong opportunity to become a significant part of the global supply chain in electronics. This strategic objective may be achieved by becoming the hub for laptops and tablets and capturing 18 percent of the global exports, the report said.
“To reach the National Policy on Electronics 2019 targets and for turning into the global manufacturing hub, we cannot depend on mobile phones manufacturing alone. We need to focus on the overall electronic sector and personal computing devices present an excellent opportunity,” said the ICEA Chairman.
As per the report, and appropriate incentive focused on export-oriented manufacturing of laptops and tablets should be offered and calibrated focused policy interventions need to be made for the sector.