Electronics Export can Touch USD 180 Billion by 2025, Says Industry

New Delhi, Aug 29 (PTI) India”s electronics exports can grow more than 16-folds to USD 180 billion by 2025 from USD 11 billion currently if industry suggestions are implemented by the government, an industry association said on Saturday.

The Electronics and Computer Software Export Promotion Council (ESC) has submitted a roadmap to the government to achieve the target in which it has recommended to expand focus of existing electronics manufacturing schemes and incentives beyond mobile production along with some policy intervention.

“At ESC, we have created a roadmap for taking India”s electronics exports, which include mobile and accessories, components and other electronics and hardware items, to USD 180 billion by 2025 to bring exports from the segment more or less at par with software exports,” ESC chairman Sandeep Narula said in a statement.

The ESC in its report said that the present ecosystem governing production linked incentive scheme (PLI) is currently limited to mobile phones and related specified component while it should be extended to the entire electronic manufacturing sector.

It highlighted that the sector as a whole is suffering from several disabilities such as higher level of taxation, high cost of power, high cost of finance etc affecting the competitiveness of the sector.

“The disadvantage works out to at least 8-10 per cent, enough to price out Indian products from the global market. This would also make Indian products, particularly components, costlier for Indian electronic product manufacturers, forcing them to go for large scale imports,” Narula said.

The government has come up with three schemes to incentivise mobile manufacturing in the country.

The Ministry of Electronics and IT has announced an incentive of around Rs 50,000 crore to attract global mobile manufacturers in the country.

According to Meity, 23 mobile phone players and component makers have submitted proposals to manufacture mobile phones worth Rs 11 lakh crore and components worth Rs 40,000-45,000 crore in the next five years.

Narula said that there is a need for bringing down the minimum incremental investment under PLI from Rs 100 crore so that MSMEs across the spectrum can take advantage of the benefits under the scheme.

According to the ESC, India”s domestic production is at USD 70 billion (around Rs 5,11,899 crore) accounting for 3.3 per cent of the global production.

“ESC felt that the Phased Manufacturing Programme (PMP) to promote locally made components is more directed at mobile phones. It has undoubtedly helped increase manufacturing of components that go into mobile phones.

“The same rule should be extended to all components manufactured in India by giving a measure of protection to the domestic component industry by increasing the import duty on such products to build a strong component supply chain,” Narula said.

The ESC has suggested that efforts to boost electronic production can be complemented by extending a purchase preference from domestic industries by the government departments, autonomous organizations and other related bodies.

The ESC report said that India desperately needs local manufacturing for employment, technology independence, national security and foreign exchange.

“Manufacturing needs easy access to raw-material, equipment and skills. This is possible only if the entire eco-system is developed. Therefore, manufacturing must be broad-based. Manufacturing cannot survive for any narrow or specific product category,” the report said.

The trade promotion body has recommended incentivising the establishment of production facilities, not just for assembly, but for raw materials too, in the country is critical. ESC said that the electronics manufacturing India heavily relies on import of raw materials and components from various countries.

During 2019-20, India”s import of electronics goods and components is estimated to be USD 52 billion (around Rs 3,80,268 crore) and out of this the major share is that of electronic components estimated at USD 16 billion (around Rs 1,17,005 crore), the report said.

“Rising labour cost in China is an opportunity for India to attract global players to look towards India for their manufacturing needs. The various suggestions if implemented timely will result in a high increase in India”s electronics goods and components exports from the current level of export of USD 11 billion,” the report said.

Source: PTI