India plans $5B incentive program to boost domestic electronics production
India is gearing up to launch a $5 billion incentive program to boost domestic production of electronic components. The initiative, according to Reuters, is part of a larger plan to reduce dependence on Chinese imports and bolster local supply chains in this fast-growing sector. The country's electronics manufacturing has grown significantly to $115 billion in 2024, more than double the output six years ago.
Reliance on imported electronic components
Despite the increase in electronics production, India continues to depend on imported components. More than half of the country's $89.8 billion electronics imports in FY24 originated from China, the Global Trade Research Initiative (GTRI) said. The new incentive scheme is expected to tackle this problem by motivating local firms to produce critical components like printed circuit boards.
Incentive scheme to boost domestic value addition
Led by the Ministry of Electronics, the incentive scheme aims to improve domestic value addition and promote deeper local supply chains. The ministry has also identified components eligible for incentives under this scheme. The program is in its final stages and is pending approval from the Ministry of Finance. It is expected to be launched in the next two to three months.
Goals for electronics manufacturing
India has set ambitious targets for its electronics manufacturing sector, looking to ramp up production to $500 billion by fiscal year 2030. This includes $150 billion in component manufacturing, as government think tank Niti Aayog outlined. Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association, commented on the initiative saying it "will encourage component production, enabling India to achieve global-scale electronics manufacturing."
