Driving India’s Electronics Revolution: A Glimpse into the Future

India’s journey in the electronics industry, stretching back to the 1960s with a focus on defence and space technologies, has evolved into a thriving sector encompassing diverse categories. Today, the electronics landscape is marked by significant contributions from Consumer Electronics, Industrial Electronics, Computers, Electronic Components, Strategic Electronics, and Communication & Broadcasting Equipment.

The Current Landscape:

  1. Consumer Electronics (31.0%):
  • Mobile
  • TV
  • Refrigerator
  • AC
  1. Industrial Electronics (20.5%):
  • Automation Systems
  • Process Control Instruments
  • UPS Systems
  • PLC
  1. Computers (9.0%):
  • Desktops
  • Servers
  • Notebooks
  • Printers
  1. Electronic Components (22.0%):
  • PCB
  • Semiconductors
  • Capacitors
  1. Strategic Electronics (7.5%):
  • Satellite-Based Communication
  • Radar
  • Internal Security System
  1. Communication & Broadcasting Equipment (10.0%):
  • DTH
  • Set Top Box
  • Routers

Source: Electricals & Electronics Manufacturing in India; ASSOCHAM India

India’s Ascent and Ambitions:

India, on its path to becoming a US$5 trillion economy, has strategically positioned the Electronics System Design and Manufacturing (ESDM) sector. This aligns with the vision of “Make in India for the World,” transcending beyond import substitution. The National Policy on Electronics (NPE) 2019 sets an ambitious target of achieving US$300 billion worth of electronics manufacturing by 2026.

Roadmap to US$300 Billion:

Product Segments2020-21 (USD billion)2025-26 (USD billion)
Mobile Phones30126
IT Hardware (laptops, tablets)325
Consumer electronics (TV and audio)9.523
Strategic electronics412
Industrial electronics10.525
Wearables and hearables8
PCBA0.512
Auto electronics623
LED Lighting2.216
Telecom equipment12
Electronic components918
Total74.7300

Source: “$300 Bn Sustainable Electronics Manufacturing & Exports By 2026” – Indian Cellular & Electronics Association

Key Facts & Figures:

  • The domestic electronics market was USD 67.3 billion in 2020-21, projected to reach ~USD 180 billion by 2025-26.
  • Electronics exports, USD 10.6 billion in 2020-21, are estimated to hit ~USD 180 billion by 2025-26.
  • India’s mobile phone production peaked at Rs 2.2 lakh crore in 2020-21.

Source: “$300 Bn Sustainable Electronics Manufacturing & Exports By 2026” – Indian Cellular & Electronics Association

Recent Trends and Changes:

Emerging trends:

  • Technology-conscious consumers: Demands for products with built-in AI are rising.
  • Big players expanding: Companies like Panasonic and Xiaomi are diversifying into new segments.
  • Contract manufacturing: Outsourcing to local manufacturers like Dixon and Amber is on the rise.

Trends in electronic components:

  • Miniaturisation: Smaller, more efficient devices.
  • Smart and connected devices: Consumer demand for intelligent, connected products.
  • Large data driving development: High-frequency applications and advanced integrated circuits.
  • Emerging System on Chip (SoC) based devices: Optimised power and connectivity features.

Shift in Strategy:

India’s approach evolved from the Phased Manufacturing Policy (PMP) to the Production Linked Incentive (PLI) in 2022. The PLI scheme, covering 14 industries, aims to make India a global hub for mobile and electronics manufacturing.

Challenges in the Industry:

  • Lack of Component Ecosystem: Importing components increases costs and lead times.
  • Punitive duty structures and tax levies: Balance needed to avoid hindering global competitiveness.
  • Restrictive PLI Conditions: Challenges for SMEs and new entrants due to stringent criteria.

Future Avenues for Growth:

Key Sectors:

  • Smartphones: PLI scheme and global market demand provide a significant opportunity.
  • Laptops & tablets: Growth expected due to IT and services expansion.
  • Hearables and Wearables: Accelerated penetration post-COVID presents growth potential.
  • Consumer & Industrial Electronics: Significant opportunity in a market estimated at around USD 368 billion by 2026.
  • Printed Circuit Board Assembly (PCBA): Crucial for every electronic device, a USD 600 billion global market.

Conclusion:

As India charts its course towards becoming a global electronics manufacturing hub, the industry’s evolution, ambitious targets, and strategic shifts reveal a nation poised for significant growth. With the right policies, a burgeoning market, and a commitment to innovation, India’s electronics journey is one to watch. The challenges are real, but the potential for success and global influence is even greater. India’s electronics story is still unfolding, and the world is watching as it shapes the future of this dynamic industry.