Solutionbuggy Team
Nov 26, 2024
The $5 billion plan aims to boost electronics manufacturing in India, offering support to both domestic and foreign companies that meet the eligibility criteria.
Overview
India is set to introduce a major incentive plan worth up to US$ 5 billion (Rs. 42,245 crore) to boost local electronics manufacturing. The initiative aims to encourage Indian companies to produce key components for devices such as smartphones, laptops, and other electronics. This move is designed to reduce the country's reliance on imports, particularly from China, and strengthen domestic supply chains in the rapidly growing electronics sector.
Electronics production in India reached US$ 115 billion (Rs. 9,71,635 crore) in FY24, more than double its output from six years ago, driven by global manufacturers like Apple and Samsung. However, despite this growth, the country remains heavily dependent on imports for critical components. In FY23, over half of India’s US$ 89.8 billion (Rs. 7,58,720 crore) electronics imports came from China and Hong Kong, according to the Global Trade Research Initiative (GTRI).
The new scheme, led by the Ministry of Electronics and Information Technology, will offer incentives for manufacturing essential components such as printed circuit boards. These incentives are expected to help develop stronger local supply chains and increase the domestic value addition to electronic products. The programme is awaiting approval from the Ministry of Finance and is expected to be officially announced within the next two to three months.
The country has set an ambitious goal to scale its electronics production to US$ 500 billion (Rs. 42,24,500 crore) by FY30, with US$ 150 billion (Rs. 12,67,350 crore) of that total to come from component manufacturing. This initiative aligns with the broader aim of becoming a global hub for electronics manufacturing while reducing dependence on imports, particularly from China. The incentives are expected to benefit both domestic and foreign companies that meet the eligibility criteria.
Conclusion
In conclusion, India’s new plan to invest US$ 5 billion in boosting electronics manufacturing is a big step toward reducing reliance on imports and building stronger local supply chains. By encouraging both Indian and foreign companies to make key components locally, the country hopes to grow its electronics industry even further. This will help India become a global leader in electronics production and create more jobs, while also reducing its dependence on countries like China.
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